By Dr Harpreet Singh | drhsinghnz.substack.com | FB: @DrHSinghNZ | BSky: @DrHSinghNZ | IG: @DrHSinghNZ
Author’s note: Take a close look at who funds The Opportunity Party. Whether built on fitness empires, software companies, or bitcoin fortunes, these donors hold vast wealth outside of real estate. That is no accident; it is precisely why the meteoric rise of donor money must be questioned. A Land Value Tax conveniently shields non-land financial fortunes while shifting the tax burden onto everyday homeowners. This isn't genuine tax reform; it’s a protected sanctuary for the ultra-wealthy.
A Tax on Land, Not Total Wealth
TOP’s proposed Land Value Tax is sometimes presented as a way to make wealthy New Zealanders contribute more. However, the policy would not tax wealth as a whole. It would tax the value of land.
Under TOP’s proposal, the full annual rate would be 1.75% on urban land, with a lower rate for rural land. TOP proposes introducing the tax gradually, beginning at a lower rate. The revenue would help fund a Citizens’ Income as part of its wider Tax Reset.
Shares, private companies, managed funds, cash, bonds, intellectual property, and overseas financial investments would not be included directly in the Land Value Tax.
Income from these assets could still be taxed under existing or proposed tax rules. Companies would continue to pay tax on profits, while investors may pay tax on dividends, interest and some overseas investments. But the value of the assets themselves would sit outside the Land Value Tax.
The Same Wealth, Different Tax Bills
Consider two people, each worth NZ$20 million.
The first owns properties with land worth NZ$15 million. At the full rate of 1.75%, that land would create an annual tax bill of NZ$262,500.
The second person has NZ$19 million in shares, managed funds, and private companies, plus a home on land valued at NZ$1 million. Their Land Value Tax would be NZ$17,500.
Both have the same total wealth, but one would pay 15 times as much in Land Value Tax. The difference is not their total wealth or income. It is how they hold their wealth.
These figures do not show each person’s final position under TOP’s complete Tax Reset, which also includes a Citizens’ Income and other tax changes. They do, however, show how the Land Value Tax would treat different forms of wealth differently.
A Wealthy Renter Could Pay No Direct LVT
The gap is clearer when considering a wealthy renter.
Someone could rent an expensive apartment while holding NZ$50 million in shares and business interests. If that person owned no land, they would receive no direct Land Value Tax bill.
The apartment’s landowner would be responsible for the tax. Market conditions would determine whether the tax had any indirect effect on rents. However, the renter’s NZ$50 million investment portfolio would not be included in the Land Value Tax calculation.
Business and Overseas Wealth Would Be Outside the Tax
Private company wealth is another significant exclusion.
A founder might own shares in a technology company worth NZ$100 million because of its software, contracts, brand and customer base. The value of those shares would not, in itself, attract Land Value Tax.
If the company owned land, it would be subject to the tax on that land. However, the remaining value of the business would be outside the Land Value Tax base.
Overseas shares and international funds would also be excluded from the LVT calculation. Investors might shift capital from land to New Zealand businesses, as TOP intends. But they could also choose foreign shares or other overseas assets. The policy cannot guarantee that money leaving land would remain in New Zealand.
Wealthy Investors Have More Options
This creates a fairness concern.
A homeowner whose main asset is the family home may have limited ability to reduce their exposure. A wealthy investor with a diversified portfolio may have more options for moving money among land, businesses, funds, and overseas investments.
A homeowner cannot easily reduce their exposure without selling or moving. A wealthy investor can sell land and buy assets that are not subject to Land Value Tax.
TOP says exemptions or deferrals may apply to some retirees, farmers and others who are “land rich but cash poor”. However, a deferral normally postpones the tax rather than cancelling it. The liability may remain until the land is sold or transferred.
The Central Fairness Question
A Land Value Tax may discourage land banking and property speculation. Land is also difficult to hide or move overseas. These are genuine strengths.
But the proposal should be described accurately. It is not a comprehensive tax on wealth.
People with the same total wealth could receive dramatically different bills. Some wealthy landowners would pay substantial amounts, while wealthier people holding shares, businesses and financial investments could pay little or no direct Land Value Tax.
TOP’s proposal taxes landowners according to the land they own, not wealthy people according to their total fortunes. Whether that is fair is the central question the policy must answer.
TOP’s Land Value Tax targets real estate rather than total wealth. Paper fortunes in shares, software, and crypto remain entirely untouched. As a direct result, everyday property owners bear the full tax burden, while non-landowning elites with identical net worths pay absolutely nothing. That makes LVT a selective levy on real estate, not genuine national tax equity.
Thank you for this. And what about the impact on Maori, who might 'own' large areas of land but wish to conserve, not commercialise it, and thus cannot pay the tax? Seems to me it is a monetary policy based on capitalist values.
Fair to discuss the pros and cons of the different tax systems; Wealth tax has a greater reach but is more of big stick and can scare off wealth like what happened in Norway. LVT has the added benefit that it incentivises investment away from land and drops housing costs (which would have a greater benefit than any redistribution).
BUT you should probably mention that the current system already taxes bitcoin, overseas share investments and financial investments for the wealthy that you are trying to illustrate and this wouldn't change under Opportunity's LVT