Buy Bitcoin in New Zealand today, sell it at a profit tomorrow or in ten years, and the tax treatment is the same. The gain counts as income and it gets taxed at whatever rate you already pay. ACT wants to put a clock on that, and on Thursday the party put a number on it.
Under a campaign pledge unveiled on 27 August, gains on qualifying personal holdings of crypto and other digital assets would not be taxed at all if the owner held them for more than 12 months. Sell inside a year and the existing rules would still bite. Professional traders and businesses trading digital assets would keep paying tax exactly as they do now.
ACT deputy leader Nicole McKee said the change would give everyday investors “certainty and simplicity” and strip out compliance work that earns the Crown very little. “Inland Revenue should focus on significant taxable activity, not trivial transactions that create more paperwork than revenue,” she said.
The party’s policy statement, quoted by interest.co.nz, argues the country “should not rely on subjective assessments of why someone bought a digital asset”. Instead it proposes a hard time test. “Under a clear bright-line test, gains on qualifying personal investments sold within 12 months would remain taxable, while gains on assets held for more than 12 months would not be taxed. Professional traders and businesses would remain subject to the existing tax rules.”
McKee said that split would give investors certainty “while keeping professional trading and business activity fully taxable so the system remains fair”.
The reason this matters to more people than it might sound is the sheer size of the crowd already holding these assets. Inland Revenue said in April it had identified 355,000 unique crypto-asset users in New Zealand, running about 57 million transactions worth $36 billion. That is roughly one in every fifteen New Zealanders, and many of them are not people who think of themselves as investors at all.
The current rules are what ACT is aiming at. Inland Revenue treats crypto-assets as a form of property, and what someone makes from selling, trading or exchanging them is taxable. Profit is added to the rest of a person’s annual earnings and taxed inside their normal bracket. Because there is no holding period and no threshold, every swap of one coin for another is a disposal that has to be priced in New Zealand dollars and worked out. Someone who moved between assets a dozen times in a year has a dozen calculations to do.
The timing of ACT’s announcement is what gives it edge. Inland Revenue spent April warning this exact group of people that the department can now see them. New Zealand is implementing the Crypto-Asset Reporting Framework, an international system under which tax authorities swap information on crypto transactions and transfers, including ones New Zealand tax residents make on overseas exchanges. The department said it had already sent a first batch of letters to people whose tax is normally assessed automatically and who it knows have traded on crypto exchanges.
Its message was blunt. “Despite popular thinking – people are not invisible on blockchain, and we have the tools and the analytics capabilities to identify and expose crypto-asset activities,” the release said.
So one arm of the state is writing to hundreds of thousands of people about undeclared gains while a governing party campaigns on making most of those gains tax free. Both things are true at once, which is the sort of contradiction elections are for.
The tax exemption is the headline but it is not the whole package. ACT also promised to remove tax on low value purchases paid for with digital assets, so that buying a coffee with crypto does not trigger a taxable event. It wants clearer rules for tokenised securities and real world assets, a regime for what it calls qualifying payment stablecoins “to unlock faster, lower cost cross border payments”, and “a supervised financial innovation sandbox where innovative businesses can trial new financial products before full licensing”. It would also look at whether red tape is stopping legitimate financial technology firms from opening bank accounts.
McKee framed the wider argument around jobs rather than speculation. Tokenised assets “can open up new sources of investment”, she said. “Stablecoins can make international payments faster and cheaper. New financial technology can create high-value businesses and jobs.”
None of this is government policy. ACT is in the coalition and McKee is Minister for Courts, but a campaign pledge is a bid for the next term, and it would need partners to agree after 7 November. Neither RNZ nor interest.co.nz reported a figure for how much revenue the exemption would give up, and that number is the one Treasury and every rival party will be asking for.
The contrast with the other side of the House is stark. Labour is campaigning on a 28 per cent capital gains tax on profit from selling investment property from 1 July 2027, with the family home, farms, KiwiSaver, shares, businesses and inheritances left out. Under Labour’s plan a landlord’s gain gets taxed for the first time while a share portfolio stays clear. Under ACT’s plan a long held crypto position joins shares on the untaxed side of the line. Two parties, two very different ideas about which kinds of gain the country should collect from.
Where the parties sit on this and everything else is worth a look before you vote. Our voting tool lets you compare the parties on the policies you actually care about. ACT was projected at nine seats in the most recent RNZ Reid Research poll, so how much weight this policy carries into any coalition talks depends on numbers nobody has yet.
Do you hold crypto, and have you had a letter from Inland Revenue? Tell us what you think of ACT’s plan in the comments below.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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