August 26, 2026 • 7 mins
The ACT party wants to allow people to make tax-free profits from cryptocurrencies, like Bitcoin, as long as they hold onto it for more than a year.
It would also make it easier to use crypto for small purchases by creating a tax exemption for such low-value transactions.
Under the current rules, investors have to calculate tax on profits every time they sell or swap their assets.
Leader David Seymour joined the Afternoons team to explain that the rest of the world is embracing cryptocurrencies and New Zealand needs to be a 'frontier' and adapt to new technology.
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Speaker 1 (00:09):
You're listening to a podcast from Newstalk ZB. Follow this
and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
The ACT Party wants to allow people to make tax-free
profits from cryptocurrencies like Bitcoin as long as they hold
it for more than a year. To discuss further, we
are joined by ACT Party leader David Seymour.
Speaker 1 (00:26):
G'day, David.
Speaker 3 (00:27):
G'day. Well, what is the problem that's trying to be
solved here, David?
Speaker 4 (00:31):
Well, the problem is that the rest of the world
is increasingly embracing cryptocurrencies and stable coins as an alternative
to the American dollar or the British pound or whatever
they use in their country. But here in New Zealand,
we have very unusual tax treatment. We're not really open
to the idea. And I want our country not to
(00:52):
be a backwater, but the frontier for a free world.
And being one of the most isolated places on earth
could go either way. If we want to be a frontier,
then we should be a country where it's natural to
use new technologies if people want to. You don't have to.
And we don't find ourselves as the place where they say,
(01:14):
you know, at the end of the world, go to
New Zealand because they're still 20 years behind. We want
to be ahead.
Speaker 3 (01:19):
So how's the tax system working now with crypto? It
seems reasonably complicated.
Speaker 1 (01:25):
Yeah.
Speaker 4 (01:26):
So let's say you have some Bitcoin, just for example,
or some Ethereum. Now, a lot of people would say
that's just money. It's just like an American dollar, New
Zealand dollar, whatever. But our tax system treats it as
an asset. And if that asset has appreciated in value,
then you can be taxed on the difference between when
(01:48):
you got that Bitcoin and when you used it to
buy a coffee, say. That seems really unusual, and it is.
We're saying that for up to $ 10, 000 of purchases a year,
you don't have to pay taxes if it's an asset.
We're going to treat it like it's actually just a
kind of money. And similarly, if you hold some Ethereum
(02:12):
or some Bitcoin or whatever, then if you hold it
for more than a year, you are no longer judged
to be trading it. So therefore, you don't have to
pay tax on any gains that you make. It's a
little bit like the Brightline test for housing. If you
hold it for more than two years, you don't have
to pay the tax. We would make it basically acceptable
(02:34):
to have small amounts that you use for just buying.
You go to some cafes, they will take Bitcoin for
a coffee. Buying and selling things in small amounts and
to keep it for more than a year without facing taxes.
Speaker 3 (02:48):
Is it kind of an honesty thing generally and going
forward with crypto? Because the IRD... Unlike bank transactions that
go through, everything's listed in your bank and it can
all be seen. Your crypto wallet is kind of personal
to you, isn't it? If you want to get the
IRD involved, that's an honesty thing.
Speaker 4 (03:12):
Well, strictly speaking, all taxes in New Zealand are voluntary.
You don't have to pay taxes, but if you don't
and they catch you, you're in big trouble.
Speaker 3 (03:21):
But I guess what I'm trying to say is it's
probably easier to hide it all and potentially the type
of personalities, knowing the crypto fans I speak to, they're
more likely to be not engaging with the IRD if
they possibly can't.
Speaker 4 (03:35):
Look, it's fair to say that people who are in crypto,
I mean, there's According to the IRD, there's 155,000 Kiwis
who are holding some sort of crypto assets. Now, of course,
that's the ones the IRD knows about. So if your
theory is correct, I suspect that there's probably quite a
few more Kiwis that are holding it. So this is
(03:56):
not for everybody yet. But if you want to be
a pathfinder and a changemaker and take on something new
and see if it works for you, then it shouldn't
be our own government's laws that make it harder than
it needs to be. The government should be there to
unlock New Zealand's potential with a simple principle. If you're
not doing anything wrong and you're not harming anyone else,
(04:17):
then make the most of your life. Why would I care?
Speaker 2 (04:19):
Do you think it's been a deliberate ploy with the
regulations and the complicated tax system to try and pour
cold water on this particular type of investing, David, so far?
Speaker 4 (04:29):
No, I would give you the same answer as anyone
saying that there's a government conspiracy. People sometimes speculate that
we're up to all sorts of things. And usually my
answer is, mate, We could never do that. We are
struggling to get children to go to school that we built.
Speaker 3 (04:44):
That's a good answer.
Speaker 1 (04:46):
Yeah.
Speaker 4 (04:46):
So there's no conspiracy. It's just that the world has
moved on and the government and the parliament, I mean,
these are institutions that evolved with pen and paper. I mean,
typewriters were state of the art at one point and
now the world's become digital and it moves and changes
much faster than our systems were set up for. For example...
(05:08):
You know, if a law goes through Parliament, there's a
six-month select committee process, and overall it usually takes about
a year to pass one law, plus another year to
prepare it before it gets introduced to Parliament. So, you know,
we've got something that moves in a two-year cycle, whereas
in the digital world, things move faster. And I just
think it's important that, you know, not for everyone. There'll
(05:28):
be some people listening saying, I don't want anything to
do with Bitcoin. Well, that's fine, but... But we should
try and be a frontier country, a country where we
can lead and not a country that people joke about
being 20 years behind. That requires the government to be
a bit more agile and say, hey, look, the way
that we've traditionally treated assets for tax doesn't really work
(05:49):
when you've got something that's kind of an asset but
can also be used as money. If people are using
it as money, they shouldn't have to pay the tax.
Speaker 3 (05:56):
Yeah, I like what you're saying. You would struggle to
find enough people in government that understand crypto to rustle
up a conspiracy probably. Maybe two or three.
Speaker 4 (06:06):
Yeah, and the ones that do aren't telling anyone.
Speaker 3 (06:09):
So in a way, the value of the NZ dollar
is the wealth of our nation, one way of looking
at it. So what's the benefit to New Zealand of
encouraging people to put their money into Bitcoin at the
expense of the New Zealand dollar?
Speaker 4 (06:26):
Well, the wealth of our nation is only valuable because
it gives some indication of the total wealth of the people.
The people are what really matters here. And if people
want to store their wealth in crypto, say, then they
haven't become any less wealthy. So the wealth of the nation...
(06:48):
currently is the NZ dollar, but it might become a
combination of the NZ dollar and other currencies and assets
that people hold. And frankly, when I look at the
way that Adrian Orr and Grant Robertson blew up the
New Zealand dollar and substantially devalued it and devalued the
wealth of the country in the process, it mightn't be
(07:11):
a bad idea for New Zealanders to have alternatives for
storing their wealth. You only have to look at what
happened to gold during the period of Adrian Orr to
see why maybe Kiwis have always wanted alternatives. And in
the modern world, you shouldn't have to have gold bars
under your mattress. You might have some Bitcoin.
Speaker 1 (07:31):
Yeah.
Speaker 2 (07:32):
It's an interesting policy. A party leader, David Seymour, thank
you very much for your time and great to catch up. Pleasure.
Speaker 1 (07:38):
For more from Newstalk ZB, listen live, on air, or online.
And keep our shows with you wherever you go with
our podcasts on iHeart Radio.
You're listening to a podcast from Newstalk ZB. Follow this
and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
The ACT Party wants to allow people to make tax-free
profits from cryptocurrencies like Bitcoin as long as they hold
it for more than a year. To discuss further, we
are joined by ACT Party leader David Seymour.
Speaker 1 (00:26):
G'day, David.
Speaker 3 (00:27):
G'day. Well, what is the problem that's trying to be
solved here, David?
Speaker 4 (00:31):
Well, the problem is that the rest of the world
is increasingly embracing cryptocurrencies and stable coins as an alternative
to the American dollar or the British pound or whatever
they use in their country. But here in New Zealand,
we have very unusual tax treatment. We're not really open
to the idea. And I want our country not to
(00:52):
be a backwater, but the frontier for a free world.
And being one of the most isolated places on earth
could go either way. If we want to be a frontier,
then we should be a country where it's natural to
use new technologies if people want to. You don't have to.
And we don't find ourselves as the place where they say,
(01:14):
you know, at the end of the world, go to
New Zealand because they're still 20 years behind. We want
to be ahead.
Speaker 3 (01:19):
So how's the tax system working now with crypto? It
seems reasonably complicated.
Speaker 1 (01:25):
Yeah.
Speaker 4 (01:26):
So let's say you have some Bitcoin, just for example,
or some Ethereum. Now, a lot of people would say
that's just money. It's just like an American dollar, New
Zealand dollar, whatever. But our tax system treats it as
an asset. And if that asset has appreciated in value,
then you can be taxed on the difference between when
(01:48):
you got that Bitcoin and when you used it to
buy a coffee, say. That seems really unusual, and it is.
We're saying that for up to $ 10, 000 of purchases a year,
you don't have to pay taxes if it's an asset.
We're going to treat it like it's actually just a
kind of money. And similarly, if you hold some Ethereum
(02:12):
or some Bitcoin or whatever, then if you hold it
for more than a year, you are no longer judged
to be trading it. So therefore, you don't have to
pay tax on any gains that you make. It's a
little bit like the Brightline test for housing. If you
hold it for more than two years, you don't have
to pay the tax. We would make it basically acceptable
(02:34):
to have small amounts that you use for just buying.
You go to some cafes, they will take Bitcoin for
a coffee. Buying and selling things in small amounts and
to keep it for more than a year without facing taxes.
Speaker 3 (02:48):
Is it kind of an honesty thing generally and going
forward with crypto? Because the IRD... Unlike bank transactions that
go through, everything's listed in your bank and it can
all be seen. Your crypto wallet is kind of personal
to you, isn't it? If you want to get the
IRD involved, that's an honesty thing.
Speaker 4 (03:12):
Well, strictly speaking, all taxes in New Zealand are voluntary.
You don't have to pay taxes, but if you don't
and they catch you, you're in big trouble.
Speaker 3 (03:21):
But I guess what I'm trying to say is it's
probably easier to hide it all and potentially the type
of personalities, knowing the crypto fans I speak to, they're
more likely to be not engaging with the IRD if
they possibly can't.
Speaker 4 (03:35):
Look, it's fair to say that people who are in crypto,
I mean, there's According to the IRD, there's 155,000 Kiwis
who are holding some sort of crypto assets. Now, of course,
that's the ones the IRD knows about. So if your
theory is correct, I suspect that there's probably quite a
few more Kiwis that are holding it. So this is
(03:56):
not for everybody yet. But if you want to be
a pathfinder and a changemaker and take on something new
and see if it works for you, then it shouldn't
be our own government's laws that make it harder than
it needs to be. The government should be there to
unlock New Zealand's potential with a simple principle. If you're
not doing anything wrong and you're not harming anyone else,
(04:17):
then make the most of your life. Why would I care?
Speaker 2 (04:19):
Do you think it's been a deliberate ploy with the
regulations and the complicated tax system to try and pour
cold water on this particular type of investing, David, so far?
Speaker 4 (04:29):
No, I would give you the same answer as anyone
saying that there's a government conspiracy. People sometimes speculate that
we're up to all sorts of things. And usually my
answer is, mate, We could never do that. We are
struggling to get children to go to school that we built.
Speaker 3 (04:44):
That's a good answer.
Speaker 1 (04:46):
Yeah.
Speaker 4 (04:46):
So there's no conspiracy. It's just that the world has
moved on and the government and the parliament, I mean,
these are institutions that evolved with pen and paper. I mean,
typewriters were state of the art at one point and
now the world's become digital and it moves and changes
much faster than our systems were set up for. For example...
(05:08):
You know, if a law goes through Parliament, there's a
six-month select committee process, and overall it usually takes about
a year to pass one law, plus another year to
prepare it before it gets introduced to Parliament. So, you know,
we've got something that moves in a two-year cycle, whereas
in the digital world, things move faster. And I just
think it's important that, you know, not for everyone. There'll
(05:28):
be some people listening saying, I don't want anything to
do with Bitcoin. Well, that's fine, but... But we should
try and be a frontier country, a country where we
can lead and not a country that people joke about
being 20 years behind. That requires the government to be
a bit more agile and say, hey, look, the way
that we've traditionally treated assets for tax doesn't really work
(05:49):
when you've got something that's kind of an asset but
can also be used as money. If people are using
it as money, they shouldn't have to pay the tax.
Speaker 3 (05:56):
Yeah, I like what you're saying. You would struggle to
find enough people in government that understand crypto to rustle
up a conspiracy probably. Maybe two or three.
Speaker 4 (06:06):
Yeah, and the ones that do aren't telling anyone.
Speaker 3 (06:09):
So in a way, the value of the NZ dollar
is the wealth of our nation, one way of looking
at it. So what's the benefit to New Zealand of
encouraging people to put their money into Bitcoin at the
expense of the New Zealand dollar?
Speaker 4 (06:26):
Well, the wealth of our nation is only valuable because
it gives some indication of the total wealth of the people.
The people are what really matters here. And if people
want to store their wealth in crypto, say, then they
haven't become any less wealthy. So the wealth of the nation...
(06:48):
currently is the NZ dollar, but it might become a
combination of the NZ dollar and other currencies and assets
that people hold. And frankly, when I look at the
way that Adrian Orr and Grant Robertson blew up the
New Zealand dollar and substantially devalued it and devalued the
wealth of the country in the process, it mightn't be
(07:11):
a bad idea for New Zealanders to have alternatives for
storing their wealth. You only have to look at what
happened to gold during the period of Adrian Orr to
see why maybe Kiwis have always wanted alternatives. And in
the modern world, you shouldn't have to have gold bars
under your mattress. You might have some Bitcoin.
Speaker 1 (07:31):
Yeah.
Speaker 2 (07:32):
It's an interesting policy. A party leader, David Seymour, thank
you very much for your time and great to catch up. Pleasure.
Speaker 1 (07:38):
For more from Newstalk ZB, listen live, on air, or online.
And keep our shows with you wherever you go with
our podcasts on iHeart Radio.
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