Could Australia's capital gains tax make NZ a business-friendly destination?
Sunday, 21 June 2026
Three weeks ago, when Australian Prime Minister Anthony Albanese announced changes to the country’s capital gains tax (CGT) system, millennial entrepreneurs and startup founders exploded in fury.
Forty of them penned an open letter to Albanese, arguing his tougher CGT regime amounted to “ambushing them” with a tax “that will hit us, the Australians we hire and the investors who back us, the hardest”.
Memes of business owners welcoming an AI-generated Albanese as a “47% silent partner” have flooded social media, while one of the letter signers, me&u founder Kim Teo, said the 47% that would be levied on startup exits ‒ double what currently exists ‒ “would feel like the Australian government are holding up a big sign for us to leave”.
Even if that sentiment is over the top, business advisor and company director Toss Grumley, who works both sides of the Tasman, says many Australian business owners he was speaking to found the newly proposed regime was affecting their “decisions around where to do business and situate themselves” moving forward.
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“It has definitely has caused a high level of upset within the Australian business owner community,” Grumley said.
And many are talking about specifically where they hope to relocate to, with Queenstown seeing a surge of interest.
Living there, says Grumley, “allows Australian business owners to live in New Zealand, potentially have tax residency here, and maintain quick access back to offices or operations in Sydney. This seems to suit people without kids, or those with older or younger children. Sydney residents fight quite hard to get their kids into certain private schools, so they are a bit resistant to giving up those slots.”
It is more than just Grumley saying Australia’s tax reform, currently under way, could see New Zealand end up an unlikely winner. Finance Minister Nicola Willis has picked up on the sentiment herself, saying “where the bloody hell are ya?” to Aussies seeking to make the jump.
Business leaders say New Zealand should leap on this momentum ‒ and could even market itself as the investor-friendly light-touch jurisdiction for startups and entrepreneurs looking for proximity to Australia.
The comparison in the area of CGT is about to become stark between the two countries.
There’s no CGT here at the moment, and while the Labour Party is promising a version of it could be introduced under a government it heads, the Australian iteration is much more comprehensive; no more cutting taxable capital gains in half for assets held over 12 months, a 50% discount is replaced by cost-based (CPI-based) indexation on assets, and a minimum tax rate of 30% is established for capital gains.
Link Business Brokers, which operates on both sides of the Tasman and calls itself New Zealand’s largest business brokerage, says that since the announcement of Australia’s capital gains tax overhaul in its May Budget, it’s seen increased interest in people wanting to sell in Australia and buy in New Zealand.
Neil Craigen, Link’s head of sales, says the uplift in inquiries to list businesses in Australia had been particularly marked.
'We've got seven franchises down the east coast of Australia, plus six offices across New Zealand, so we get a good sense check from the breadth of our organisation. Since the CGT stuff was announced in Australia, we've seen an uplift in traffic to our website of over 39%.
“There's a big lift from the Australian perspective to actually get businesses sold before these changes come into play, because the impact from what people are working on, and certainly on the $2 million plus space, could be quite significant,” Craigen told the Sunday Star-Times.
If Australia pressed on with plans to include residential and commercial property in a capital gains tax framework, it would likely “only be a matter of time” before business sales fall into a bracket.
That would again make New Zealand an attractive market for business owners who may look to relocate, he said.
At the moment, a sale in Australia was not automatically leading to a purchase in New Zealand, he said, but “a few of the Australian bigger businesses are actually buying in New Zealand to give themselves an extra territory. Because personal tax in New Zealand is lower than Australia, New Zealand has started to look friendlier.
“We’re seeing a brain drain of the youth heading over to Australia, but I think we're going to see people in business start to think a bit differently too.
“I think we’ll start to see more experienced business people starting to say ‘can I get a lifestyle adjustment and lower tax if Australia puts the CGT stuff through?’”
Craigen said of the “silver tsunami” ‒ those who make up the ageing population ‒ “they've been through a global financial crisis in 08/09, they've been through Covid in 2020/21, they've been through a recession, these guys are tired”, and so there had been an influx of businesses come on the market.
“We remain an attractive jurisdiction for privately owned businesses. There's a bit more certainty, and we're a little bit easier to do business with right now, so that’s certainly an opportunity.”
What a tax expert says
Deloitte tax partner Robyn Walker says New Zealand has advantages in terms of our comparative simplicity and lack of a CGT, but tax is just one consideration when determining the location of a business.
“The advantage that Australia has over New Zealand is the size of its domestic market. If a business relocated here but continued to be selling into the Australian market or continued to own assets in Australia, then there will still be CGT to pay if there are gains on assets,” Walker said.
“If a business is more digital or not asset intensive and selling globally, not dependent on the Australian market, then moving to New Zealand would be something to consider.”
When trading internationally, there would always be international tax issues and complexity to deal with, she said.
Capital gains taxes are commonplace in other countries, but they also bring complexity to the legislation and there has always been a question mark over the relative trade-off between the complexity versus the level of “fairness” brought to the tax system, Walker said.
“Some might say that the Australian government has swung the pendulum too far from what many people consider to be a fair tax design.”
From a revenue perspective, CGT was often subsumed within general income tax, so the level of tax generated from a CGT was opaque, she said.
“CGT is not viewed as being a significant, consistent or reliable source of government revenue, as compared to other taxes, especially GST.
“When comparing New Zealand and Australia at a superficial level, New Zealand definitely comes across as a much simpler destination.
“When you look at New Zealand tax history, New Zealand has had a wide range of different taxes over the years but we have consciously repealed the many small, compliance-heavy taxes which still exist in other countries, including Australia.”