ACT proposes tax-free crypto gains for holdings over one year

ACT has proposed exempting personal cryptocurrency gains from tax if the asset is held for more than a year, a policy the party says would simplify compliance for everyday investors while keeping professional traders fully taxed.

The pledge, unveiled on 26 August and detailed in a release on ACT's website the following day titled "Unlocking New Zealand's Digital Economy," would mean gains on certain personal crypto held for more than 12 months would not be taxed. Low-value crypto transactions would also receive a tax exemption, intended to make it easier to use crypto for small purchases (RNZ).

Under current New Zealand rules, crypto investors must calculate tax on profits every time they sell or swap their assets. There is no long-term capital gains threshold for crypto — every disposal triggers a taxable event. That means if you swap one type of crypto for another, or sell for New Zealand dollars, you owe tax on any profit. ACT's proposal would carve out personal holdings past the 12-month mark. Professional traders, businesses trading crypto, and anyone who sold or swapped assets within a year would still pay tax under the existing rules.

ACT deputy leader and Minister of Courts Nicole McKee, who authored the party's release, said the proposed changes would give everyday investors "certainty and simplicity" and remove unnecessary tax compliance. McKee said Inland Revenue should focus on significant taxable activity, not trivial transactions that create more paperwork than revenue (RNZ).

Inland Revenue's own figures give a sense of the scale. The department says 355,000 New Zealanders use crypto, with $36 billion worth of transactions recorded. In April, IR issued a reminder to those buying and selling crypto to "get tax compliant now" to avoid "an expensive surprise down the line." An IR spokesperson said people are not invisible on blockchain and that the department has tools and analytics to identify and expose crypto-asset activities.

The policy sits within a broader digital economy package ACT has assembled. The party also promised clearer rules for companies working with digital currencies such as stablecoins — crypto tokens designed to hold a steady value, usually pegged to a currency like the US dollar. ACT also pledged a new regulatory sandbox system where financial start-ups could test new ideas without facing all the same rules as big banks, and said it would investigate whether red tape was unnecessarily preventing legitimate financial tech companies from opening bank accounts.

The broader context here is a tax system that treats crypto under general income tax principles, with no bespoke long-term holding exemption comparable to regimes in some other jurisdictions. For the 355,000 New Zealanders IR identifies as crypto users, that means tracking the original cost of every asset across every trade and swap, often across multiple exchanges and wallets. The compliance burden falls heaviest on retail investors who may lack the accounting infrastructure of professional traders, who would remain fully taxed under ACT's proposal.

The 12-month holding threshold is the policy's defining design choice. It draws a line between speculative short-term trading and longer-term holding, taxing the former and exempting the latter. The low-value transaction exemption addresses a separate friction point: the impracticality of calculating tax on a token used to buy a coffee. Whether Inland Revenue would accept the reduction in its tax base is a separate question. IR's April compliance push, paired with its stated analytics capability, signals a department that views crypto tax enforcement as an active priority.

ACT's digital economy release was published on the party's website on 27 August 2026, authored by McKee. The party's leader, David Seymour, serves as MP for Epsom and Deputy Prime Minister. ACT's policy platform spans categories including Economy & Cost of Living, Health, Law & Order, Equal Rights & Democracy, Housing & Infrastructure, Backing Rural NZ, Education, and Hunting, Conservation & Firearms (ACT).

The proposal is a campaign pledge, not government policy. Whether it advances will depend on coalition dynamics after the election and the willingness of any governing partner to accept a crypto tax carve-out that reduces the revenue base.