What are the Opportunity party's land tax and 'citizen's income'?

The Opportunity Party are soaring in the polls and could be a potential kingmaker after November's election. We look at what they would bring if they make it into Parliament, and explain their key policies, which have been rejected by National and Labour.

The party say their tax policies would hand up to $19,400 a year to every adult, abolish unemployment benefits and impose a new tax based on land values that the party says is designed to push house prices down. So, does it all add up?

Here's what the party is proposing, what it would mean in practice, and where these ideas have been tried before.

The centrepiece is a citizen's income – a universal basic income, by another name – of $19,400 a year. It would be paid fortnightly and tax-free to every citizen and resident aged 18 and over.

"No forms to fill in, no Work and Income appointments, no relationship status checks – just a guaranteed payment that provides the basics," the party has said.

It is deliberately pegged to the current Jobseeker rate, but it would replace the unemployment benefit, Sole Parent Support, the Student Allowance, and the Supported Living Allowance.

Universal basic incomes have been trialled in jurisdictions overseas, but never rolled out nationally at full scale in a developed economy.

To pay for it, income tax rates would rise across the board at 28% on income up to $50,000. That's a substantial jump from the current bottom rate of 10.5% up to $15,600 and 17.5% from $15,601-$53,500.

But, because every New Zealander receives the $19,400 first, the party says the package amounts to "a reduction in total income tax at all income levels, with the largest reductions at lower income levels where it is most needed".

A worker on $60,000 currently pays roughly $11,000 in income tax.

Under Opportunity's proposed brackets, they'd pay more – $17,400 – but then also be pocketing the $19,400 payment, leaving them about $13,000 better off than today.

On $120,000, the citizen's income still leaves an earner around $11,600 ahead.

The gains shrink as income climbs, and that's before the land value tax enters the picture.

Opportunity believes the core of how it'll make the books stack up is based on a land value tax.

The annual tax would be charged at 1.75% on a property owner's land value in urban areas, and 0.5% for rural land.

The party says the current tax system is out of date, having been built in 1986, and that the land tax will lower house prices. "A Land Value Tax makes housing affordable by shifting the tax load off working people and onto land," it says.

There would be exemptions and deferrals for what it calls "land rich, cash poor Kiwis" such as farmers and retirees.

Opportunity leader Qiulae Wong has said: "Our tax policy overall actually would be a tax cut for 70% of New Zealanders. They would be better off under our full tax policy. Twenty percent would be about neutral, and then only 10% would be paying slightly more," she said.

The third part of the party's "tax reset" relates to KiwiSaver. Opportunity says compulsory contributions by both employees and employers will rise "over time" to 6%.

It says that will build "a trillion-dollar capital pool to fund infrastructure and national development".

The case for taxing land is one of the oldest and least contested in economics.

The reason for the rare consensus is that land is fixed in supply. Tax wages and then people may work less. Tax buildings and people build less. Tax land and the land doesn't go anywhere, so the argument goes.

Internationally, Denmark has levied a land value tax for more than a century. Taiwan taxes land separately from buildings, and Estonia has taxed land since the 1990s.

New Zealand is unusual in not having even a capital gains tax, which taxes people on the value gain they make when selling a property compared to what they paid for it.

A capital gains tax is a regular feature of our recent election campaigns, sometimes supported by Labour and always by the Greens – but no party in power has enacted one.

Labour has said, if elected in November, it would introduce a set 28% capital gains tax on commercial and residential property, excluding key assets such as the family home, farms, KiwiSaver, shares, business assets, inheritances and personal items.

National's Christopher Luxon quickly branded the plan "very uncooked". He said: "This is a tax on every single business in New Zealand."

The two biggest parties, National and Labour, have ruled out Opportunity's tax policies. Luxon has gone further and ruled out National working with the party in a coalition at all.

Luxon said earlier this month: "Well, I'm just saying to you, they want to increase taxes. We're a party of low tax. It wouldn't be surprising to any of you to say we don't think we want to do business with them ... we wouldn't be working with them."

Labour leader Chris Hipkins said in July: “We won’t support the tax policy put forward by Opportunity, we also won’t support the wealth taxes, land taxes and other things put forward by the Greens either. We’ve got one simple tax policy which is a simple targeted capital gains tax, that’s as far as we’re going to go.”

What actually happens in coalition negotiations is anyone's guess as parties trade policies – as current and former prime ministers can attest. But the two men most likely to be in the top job after November 7 have been quite clear where they stand on Opportunity's "tax reset".