How Will the 2026 Election Affect the NZ Property Market?
Updated 2026-10-14T13:36:00+13:00
Quick answer: Usually only a little. Bayleys’ analysis of every election since 2002 found no consistent slowdown in sales. Activity dipped in 2014 and 2017, when capital gains tax and foreign buyer rules were hot topics. Interest rates usually matter more to buyers than who wins.
Key Dates
- Mon 26 October: advance voting opens
- Wed 28 October: Reserve Bank OCR review
- Sat 7 November: election day
- Fri 27 November: official results
With the election just weeks away, we’re hearing the same question from a lot of clients: should I hold off until it’s over? It’s a fair thing to ask. Capital gains tax is back on the table, parties are making promises to first home buyers, and mortgage rates have crept up this year.
Here’s what history tells us, where the parties stand on property, and what it all means if you’re buying, investing or refixing over the next few months.
Do Elections Slow the Property Market?
Not as much as you might think. Bayleys compared house sales in each election quarter with the same quarter in the years either side. In most elections since 2002, sales sat in the normal range.
Election year | Sales vs a normal year | What was going on |
2002 | 96% | Normal |
2005 | 109% | Normal to stronger |
2008 | 70% | Global financial crisis |
2011 | 98% | Normal |
2014 | 78% | Capital gains tax debated |
2017 | 87% | Bright-line test and foreign buyer ban debated |
2020 | 130% | Record low rates, post-lockdown boom |
2023 | 96% | Normal |
Source: Bayleys Insights, May 2026. Anything between 95% and 105% is a normal year.
The pattern is pretty clear. 2008 was about the global financial crisis, not the election. The two years that did slow down, 2014 and 2017, were the ones where property tax was a big part of the campaign. Buyers and sellers waited to see what would happen, then activity picked back up once the result was known.
What's Different About 2026?
Three things stand out this time…
- Capital gains tax is back in the debate. Labour is campaigning on a 28% tax on gains from residential investment and commercial property, starting 1 July 2027. That’s the type of issue that made people pause in 2014 and 2017.
- Interest rates are rising, not falling. The Reserve Bank has lifted the Official Cash Rate (OCR) twice this year, taking it to 2.75% in September.
- The market is already flat. Prices are holding steady or easing slightly in many areas. In Tony Alexander’s September survey of real estate agents, a net 41% said prices were falling and a net 49% said fewer investors were buying.
Even so, Bayleys expects the election to have no more than a minor effect on the market this year, with interest rates likely to matter more.
Where the Parties Stand on Property
Here’s a side-by-side of the main property policies, drawn from each party’s announcements and MyMortgage’s policy summary, as published at 2026-10-14T13:36:00+13:00.
Party | Property tax | Landlord interest deductions | First home buyers | Other housing policy |
National | No new property taxes. Bright-line test stays at 2 years | Stays at 100% | Lift the First Home Loan income cap to $300,000 | Planning and consenting reform, easier granny flats |
Labour | 28% capital gains tax on residential investment and commercial property from 1 July 2027. Family home exempt. Replaces the bright-line test | Stays at 100% | No new scheme announced | Funds free GP visits from the tax |
Green Party | Bright-line test back to 10 years. 2.5% wealth tax on net assets over 10𝑚(20m for couples), family home exempt | Removed | Large public housing build | Caps on rent increases, tighter tenancy rules |
ACT | Opposes capital gains and wealth taxes | Stays at 100% | Focus on building more homes | Build on your own land, opt out of council consents |
NZ First | Opposed a capital gains tax in 2019 (confirm) | Not stated (confirm) | Considering a government co-investment (shared ownership) scheme | Has historically been cautious on foreign buyers |
Parties can change their policies during a campaign, and what becomes law depends on coalition talks after the election. This table is for information only. Rapson doesn’t favour any party.
What the Election Could Mean for First Home Buyers
The biggest first home buyer policy on the table is National’s plan to lift the income cap on the Kāinga Ora First Home Loan to $300,000. The First Home Loan lets you buy with a 5% deposit instead of the usual 20%. Right now it’s limited to people earning $95,000 or less on their own, or $150,000 or less for couples and single buyers with dependants. Those caps haven’t moved since 2022, so many dual-income households earn too much to qualify.
NZ First is looking at a scheme where the government would co-own a home with eligible first home buyers, though the details haven’t been released yet.
A few things won’t change whatever the result:
- Bank lending rules. Loan-to-value and debt-to-income limits are set by the Reserve Bank, not the government of the day.
- Serviceability. A smaller deposit gets you in the door sooner, but the bank still needs to see you can afford the repayments. A 5% deposit doesn’t mean a bigger budget.
- KiwiSaver. You can still use your KiwiSaver savings towards your first home.
If you’re close to buying, it’s worth checking whether you’d qualify for a First Home Loan now, and whether a higher income cap would change your options. Our First Home Grant NZ guide covers all the help available right now.
What the Election Could Mean for Property Investors
For investors, tax is where the parties differ most…
- Interest deductions. National, Labour and ACT have all said they’ll keep 100% interest deductibility for residential landlords. Labour confirmed this in September. The Green Party would remove it. Our interest deductibility guide explains how the current rules work.
- Capital gains. Under National and ACT, the bright-line test stays at 2 years, so you only pay tax on a gain if you sell within 2 years. Labour would replace the bright-line test with a 28% capital gains tax from 1 July 2027. Labour has said properties would be valued on that date, so the tax would only apply to gains made after it. The detail of how values are set is still to come.
- Bright-line under the Greens. Extending the test back to 10 years and removing interest deductions would be the biggest change for investors of any party’s plan.
The practical step is the same either way: run the numbers on your portfolio under both scenarios, talk to your accountant, and avoid making a rushed decision before the result and the coalition deal are known.
Mortgage Rates: Why the OCR Matters More Than the Election
The Reserve Bank sets the OCR independently of the government, with the job of keeping inflation between 1% and 3%. So the election result won’t change mortgage rates overnight.
The OCR is currently 2.75% after two increases this year. The next review is on Wednesday 28 October, right in the middle of advance voting, and some economists expect one more increase before the end of the year. Fixed rates tend to move ahead of the OCR, because banks price in what they expect the Reserve Bank to do.
Where the election can matter is over the longer term. Government spending and tax decisions affect inflation, and inflation drives the OCR. That plays out over months and years, not on election night. For more on how the OCR flows through to your mortgage, read our OCR explainer.
The Election Result & What Happens Next
We’ll update this section with the result on Monday 9 November, and again once the new government has formed.
Keep in mind that election night isn’t the final word. Official results come out on 27 November, and coalition talks can take a few weeks after that. In 2023, the new government wasn’t sworn in until 27 November, more than six weeks after election day. Policies only change once they’ve been agreed and passed into law.
Should You Wait Until After the Election?
For most people, there’s no need to put plans on hold.
Here’s how we’d think about it…
- Buying: If you’ve found the right place and the numbers work, the election isn’t a reason to walk away. Pre-approvals usually only last a few months, so check yours won’t run out mid-search.
- Selling: Some buyers may sit on their hands in the weeks before 7 November. Talk to your agent about timing, but remember that history shows any pause tends to be short.
- Refixing: Don’t let your fixed rate roll onto floating by default. Start comparing options four to six weeks before your term ends. The timing of your refix should follow your rate expiry, not the election.
- First home buyers: Check whether you’d qualify for the First Home Loan now, and whether a higher income cap would open it up for you. Our How Much Can I Borrow guide and mortgage calculator are good starting points.
Investors: Model your plans with and without a capital gains tax, and get tax advice before buying or selling.
FAQs
Do house prices drop before an election?
Not usually on their own. Sales slowed before the 2014 and 2017 elections, when property tax was a big debate, but prices are driven more by interest rates, housing supply and the wider economy.
Should I wait until after the election to buy?
Only if your decision depends on a specific policy, like the First Home Loan income cap. Otherwise, finding the right property and the right finance matters more than the date.
Will mortgage rates change after the election?
Not because of the election itself. The Reserve Bank sets the OCR independently, and its next review is on 28 October. Rates follow the OCR and inflation, not who’s in government.
What is Labour’s capital gains tax, and would it apply to my home?
Labour has proposed a 28% tax on gains from selling residential investment and commercial property, applying to gains made after 1 July 2027. Your family home would be exempt. Labour has also said farms, KiwiSaver and shares would be excluded, with full details still to come.
What happens to the bright-line test?
Right now it’s 2 years for residential property bought on or after 1 July 2024. National and ACT would keep it as it is, Labour would replace it with a capital gains tax, and the Green Party would extend it back to 10 years.
Should I refix before or after the election?
It depends on when your current fixed term ends, not on the election. Talk to an adviser four to six weeks before your rate expires so you have time to compare options.
Talk It Through with a Rapson Adviser
Whatever the result on 7 November, our team can help you work out what it means for your plans, whether you’re buying your first home, growing a portfolio or refixing. Book a chat or call us on 07 577 1209.
This article is general information only and isn’t financial or tax advice. Party policies are as published at 2026-10-14T13:36:00+13:00 and may change. Talk to a Rapson adviser about your own situation.