Capital gains in NZ: the bright-line test, shares and FIF

Last reviewed October 23, 2026

Tax on a $10,000 gain on shares NZ shares you didn’t buy to sell: no tax on the gain

You keep: $10,000
Tax: $0

When gains are taxed

Gains are taxed as income, at your normal tax rate, when:

You bought to sell. If you bought something with the purpose of selling it, the gain is taxable, however long you held it.
You’re a trader or dealer, for example buying and selling shares or property as a business.
The bright-line test applies: residential property sold within 2 years of buying it (for sales agreed from 1 July 2024). Your main home is usually excluded.

Because “bought to sell” depends on your purpose, keep a note of why you bought an investment, especially if you might sell it within a few years.

NZ shares, and Australian shares on the main ASX index: gains usually aren’t taxed unless you bought to sell. Dividends are taxed, with imputation credits for tax the company has paid.
Overseas shares and funds costing over $50,000 in total: the foreign investment fund (FIF) rules usually tax you on 5% of their value at the start of the year, whatever they actually earned.
Under $50,000 of overseas shares: you’re taxed on the dividends, and gains usually aren’t taxed unless you bought to sell.
PIE funds, including KiwiSaver, don’t pay tax on gains from NZ and most Australian shares. Their overseas shares are taxed on 5% of their value, at your prescribed investor rate.

Example: your overseas shares cost $55,000 and are worth $60,000 on 1 April. Under the FIF rules, 5% of that, $3,000, is added to your taxable income. At a 33% tax rate, that’s $990 of tax, even if you sold nothing.

In a year when your FIF investments make less than 5%, you can usually pay tax on what they actually earned instead. If they fall in value, that can be nothing.

New migrants and returning New Zealanders away for 10 years or more don’t pay tax on most overseas income, FIF included, for their first 4 years.

Crypto

Inland Revenue treats crypto as property. Most people buy it to sell it later, so the gains are usually taxable income when you sell, swap it for another coin or spend it. Keep records of what you paid and what you got for every trade.

Property

Besides the bright-line test, property can be taxed if you bought it to sell, or if you develop or subdivide land. Rent from an investment property is taxable income, and you can deduct the mortgage interest again from 1 April 2025. Get advice before selling property you haven’t lived in.

See where to invest for how each investment is taxed.

Frequently asked questions

Does New Zealand have a capital gains tax?

Not a general one. But some gains are taxed as income: when you bought something to sell it, when you trade as a business, when the bright-line test applies to property, and on overseas shares under the FIF rules.

What is the bright-line test?

If you sell residential property within 2 years of buying it, the gain is taxed as income. It applies to sales agreed from 1 July 2024, and your main home is usually excluded.

Do I pay tax on US or other overseas shares?

If the overseas shares and funds you hold cost more than $50,000 in total at any time in the year, the FIF rules usually tax you on 5% of their value at the start of the year. Under that, you’re taxed on the dividends instead.

Is crypto taxed in New Zealand?

Usually, yes. Inland Revenue treats crypto as property, and because most people buy it to sell it later, the gains are taxed as income at your tax rate.

Are gains in KiwiSaver and PIE funds taxed?

The fund pays the tax for you at your prescribed investor rate. Gains on NZ and most Australian shares aren’t taxed, and overseas shares are taxed on 5% of their value under the FIF rules.