New Zealand's ACT party has unveiled a proposal to modernize the tax treatment of digital assets, including a capital gains tax exemption for retail investors who hold cryptocurrency for over a year and exemptions for small personal purchases made with crypto.
The party, which holds 11 seats in Parliament, framed the proposal as part of a broader effort to modernize digital finance rules and boost long-term retail investment in crypto assets.
Key Proposal Details
Under the ACT plan, individual retail investors would be exempt from capital gains tax on crypto holdings retained for more than one year. The exemption would not apply to professional traders or businesses, which would remain subject to existing tax rules. Crypto assets held for less than a year would continue to be taxed.
Additionally, the proposal would exempt small personal purchases from taxes when paid with cryptocurrency, positioning digital assets as a practical payment method.
Broader Digital Finance Framework
The proposal extends beyond tax measures to include other provisions:
- Creating a clear regulatory and tax framework for qualifying payment stablecoins
- Establishing legal and tax rules for tokenized securities and real-world assets
- Setting up a regulatory sandbox for startups to test innovative products
- Reviewing current regulatory policies to assess whether crypto businesses have been excluded from financial infrastructure
Deputy ACT Leader Nicole McKee stated that the party aims to establish clear rules and safeguards to support digital economy development and financial innovation in New Zealand.
