Tax & Business Newsletter – August 2026

Welcome to our August 2026 newsletter. This issue opens with the first wave of bank rate changes following July's OCR hike, before turning to a little-known Inland Revenue power that lets the Commissioner deduct unpaid tax directly from your bank account. We also unpack the property tax positions taking shape ahead of the November election, look at how the Australia–New Zealand comparison is playing out for investors, and consider why wealth planning needs to look beyond the family home.

Business and Economic Update – Banks Begin Repricing

Following the Reserve Bank's 25-basis-point OCR hike to 2.50% at its 8 July Monetary Policy Review (covered in our July newsletter), retail banks have begun repricing both lending and deposit rates. ANZ, New Zealand's largest retail bank, announced on Tuesday 4 August that it was raising fixed home loan rates across terms from six months to three years by 10 to 26 basis points, effective Thursday 6 August. Its 6-month special rate rises 10 basis points to 4.79%, the 1-year by 20 basis points to 4.99%, the 18-month by 26 basis points to 5.45%, the 2-year by 20 basis points to 5.49%, and the 3-year by 10 basis points to 5.59%. Westpac and Kiwibank had already lifted home loan rates immediately after the July OCR decision.

Term deposit holders benefit from the same repricing: ANZ's term deposit rates rose 10 to 30 basis points across six-month to two-year terms from Wednesday 5 August, taking the 6-month rate to 3.55% (the highest in the market, per the bank) and the 18-month and 2-year rates to 4.20% and 4.30% respectively. ANZ said the moves reflected a broad rise in wholesale funding costs amid ongoing global uncertainty linked to the Middle East conflict, and that it was balancing the needs of both borrowers and depositors.

Separately, the Financial Markets Authority has noted that banks vary in how quickly they pass OCR movements through to borrowers and savers – worth keeping in mind when comparing offers. The Reserve Bank's next OCR review and Monetary Policy Statement is due on 2 September 2026.

Action: If you're refixing a mortgage or renewing a term deposit in the next few months, compare rates across providers rather than defaulting to your existing bank, and factor a higher-for-longer interest rate environment into cash-flow forecasts.

Inland Revenue's Power to Withdraw Funds Directly From Your Bank Account

Many taxpayers are surprised – and often distressed – to learn about a power Inland Revenue holds to recover unpaid tax. Under section 157 of the Tax Administration Act 1994, the Commissioner can issue a “deduction notice” to any third party who holds or owes money to a taxpayer with overdue tax. This most commonly means your bank, but it can equally apply to your employer or a customer who owes you money. Once issued, the third party is legally obliged to pay the specified amount – up to 100% of the funds held – directly to Inland Revenue, without your consent and, in many cases, without you finding out until after the funds are gone. The power extends to joint bank accounts: if you can withdraw funds from a joint account without the other account holder's signature, Inland Revenue can deduct from that account too.

Inland Revenue issued around 16,500 deduction notices between mid-June and end-September last year alone, a 25% increase on the entire previous year, recovering over $22 million in that period. While a copy of the notice should be sent to you, this doesn't always happen in practice – particularly where Inland Revenue doesn't hold a current address – and the notice takes immediate effect regardless.

What this means for you:

• Stay current with your tax obligations, and if you can't, engage with Inland Revenue – or with us – before debt escalates. Inland Revenue's own stated practice is that deduction notices are generally a last resort, used after repeated unanswered contact attempts and where no payment arrangement is in place.

• Taxpayers keeping to an agreed instalment arrangement, or formally disputing an assessment, are not usually subject to a deduction notice.

• If you have outstanding GST, PAYE, income tax, or any other tax debt, or are unsure of your position, contact us – we can review your position, negotiate a payment arrangement with Inland Revenue on your behalf, advise on your rights if a notice has already been issued, and help put safeguards in place.

Action: Don't wait to find out about this the hard way – if you have any outstanding tax or are unsure of your current position, get in touch with us now, in confidence.

Election Watch – How the Parties' Property Policies Compare

With the General Election confirmed for Saturday 7 November 2026, property tax policy is shaping up as one of the more consequential dividing lines between parties. Investment and advisory firm Opes Partners has published a “cheat sheet” ranking each major party's property policy by the scale of change it would bring, from smallest to largest impact: National, ACT, NZ First, Labour, Greens, and the Opportunity Party (Te Pāti Māori's housing and tax measures are published only at a summary level and haven't been refreshed for the 2026 campaign, so weren't ranked).

The most far-reaching and potentially destructive policy on the table is the Opportunity Party's proposed annual land value tax of 1.75% on urban land (0.5% on rural land), applied to unimproved land value with buildings and improvements excluded. Unlike every other party's property tax proposal, this is the only one that would apply to the home you live in. The scale of impact cannot be overstated.

On unimproved land value of $450,000, the annual tax would work out to roughly $7,875 a year (approximately $151 per week). For an average Auckland residential property with a capital value of $1.29 million (57.5% attributed to land value), the annual land tax would take approximately $12,980 from the property owner every year – indefinitely. This is a recurring annual cost regardless of whether the property generates income.

The party's own modelling projects land and property values falling 10–15% as a direct result. For first-home buyers who have just purchased with a standard 20% deposit, this would immediately wipe out their equity. A 15% property decline would eliminate their deposit entirely, leaving them with negative equity and no incentive to maintain the property – a direct path to mortgage defaults and surrendered keys to banks. For property investors with leveraged portfolios, a 15% value decline combined with ongoing annual land tax creates severe cash-flow problems.

Asset-rich but income-poor retirees relying on home equity face a choice between paying the tax or triggering forced sales. Combined with removal of the KiwiSaver first-home withdrawal facility and a 12% mandatory KiwiSaver contribution (up from current 10%), young people face even higher barriers to home ownership. The tax would raise approximately $24 billion annually, funded by a $19,400 Universal Basic Income and new tax brackets of 28%, 34%, and 39%. While the party claims 70% of New Zealanders would be net positive, the reality for property owners is far grimmer: a substantial wealth transfer masked by headline income tax reductions, triggering negative equity, defaults, and forced sales.

The other parties' positions are less far along the published-detail spectrum at the time of writing, and coalition negotiations after 7 November could change any of them regardless of what's currently on the table. This is general information only, not a voting recommendation or financial advice – where any of it lands for you depends on your whole financial picture, not just your property holdings.

Action: Resist the urge to restructure property holdings on the strength of election-year policy announcements alone. Wait for confirmed legislation, and talk to us before making any structural decisions in response to policy proposals that may not survive the election, let alone coalition negotiations.

Kiwi Investors and the Australian Comparison

A recent opinion piece by Auckland Business Chamber chief executive and former National Party leader Simon Bridges (NZ Herald, 24 July) argues that Australian business and investor sentiment has soured since Australia's Budget on 12 May introduced a capital gains tax that critics say is dampening entrepreneurial appetite, alongside rumours of a further wealth-resources tax. He contrasts this with Finance Minister Nicola Willis's campaign inviting Australian business owners and investors to New Zealand on the strength of no capital gains tax, a simple broad-base low-rate tax system, and accelerated depreciation on capital investment.

The comparative economic data is genuinely mixed. Australia's inflation (around 4%) and New Zealand's (which has just reached 4.1%) are now similar, but Australia's unemployment rate (4.4%) remains lower than New Zealand's (5.3%), and Deloitte Access Economics forecasts Australian growth slowing to around 1.3% this financial year and staying under 2% after that. Working the other way, OECD data shows New Zealand's real wages fell further than Australia's through the COVID period and beyond – New Zealand ranked last of the 37 OECD countries on this measure – and net national income per capita in Australia was around 30% higher than New Zealand's in 2024, a gap the NZ Initiative's Dr Bryce Wilkinson puts at roughly $20,000 per New Zealander a year. Stats NZ recorded a net 28,500 people shifting from New Zealand to Australia in the year to December 2025.

A weak New Zealand dollar (its softest relative level in over a decade) currently makes New Zealand businesses and property comparatively cheap for Australian-dollar buyers, at the same time as our own Reserve Bank has begun lifting rates.

Action: If you're weighing up structuring, migrating, or investing across the Tasman, get tailored advice rather than relying on headline comparisons – residency, tax residency, and structuring rules on both sides of the Tasman matter more than any single statistic.

Wealth Beyond the House – KiwiSaver and Diversification

Stuff's “Wealth of the Nation” research, discussed by Fisher Funds general manager of managed funds Robyn Conway (Stuff, 5 August), found that 68% of New Zealanders define wealth as owning a home or property – understandable given a mortgage-free home provides real stability in retirement. But with property prices having plateaued or fallen over the past four years in many areas, home equity isn't building the way it once did, and Conway notes this appears to be coinciding with New Zealanders engaging with KiwiSaver at record levels, with 29 providers now competing for members.

Almost a third of respondents in the same research named “pay yourself first” or prioritising savings as their best money tip. For business owners and sole traders in particular – who don't have the automatic KiwiSaver payroll deductions and employer contributions that PAYE employees receive – this is worth deliberate attention rather than an afterthought.

Action: If your retirement plan still leans mainly on the value of your home or business, talk to us about building a deliberate savings and investment strategy alongside it – particularly if you're a sole trader or business owner without automatic KiwiSaver contributions. We can work alongside a licensed financial adviser on the numbers.

Key Tax Dates Snapshot – August to November 2026

This is a high-level guide only. Always confirm your exact due dates in myIR.

How We Can Help

Should you have questions about any matters covered in this newsletter, or need assistance with:

• Understanding how the OCR and bank rate movements affect your lending, savings, and cash-flow planning

• Reviewing your tax position and putting safeguards in place against Inland Revenue debt collection, including deduction notices

• Negotiating payment arrangements or instalment plans with Inland Revenue on your behalf

• Making sense of election-year property tax policy without over-reacting to proposals that may never become law

• Cross-border structuring and tax residency advice for clients considering opportunities in Australia or elsewhere

• Building a retirement and wealth diversification strategy that doesn't rely solely on property

• Trust, insolvency, and general tax and business advisory support, as always

We are here to help you navigate the changing tax and business environment.

Contact Greenlane CA Limited

• Email: info@glca.co.nz

• Phone: +64 9 522 5182

• Website: www.glca.co.nz

• Address: 97 Great South Road, Greenlane, Auckland 1051

Disclaimer

This newsletter is published by Greenlane CA Limited for informational purposes only. The content provided herein is of a general nature and does not constitute professional tax, accounting, legal, or financial advice. While every effort has been made to ensure the accuracy and completeness of the information contained in this newsletter, Greenlane CA Limited makes no representations or warranties, express or implied, as to the accuracy, reliability, completeness, or currency of the information.

Readers should not act or refrain from acting based solely on the information in this newsletter without first seeking professional advice tailored to their specific circumstances. Tax laws and regulations are subject to change, and the application of these laws depends on the particular facts and circumstances of each case.

Greenlane CA Limited, its directors, employees, and agents accept no responsibility or liability for any loss, damage, cost, or expense, whether direct, indirect, consequential or otherwise, incurred by any person as a result of relying on the information contained in this newsletter, or any errors or omissions therein, howsoever caused.

For advice specific to your situation, please contact Greenlane CA Limited directly.