The election is effectively a re-run of 2023, pitting National's Mr Luxon against Labour's Chris Hipkins as the most likely prime ministers.
However, in 2026, the roles are reversed, with Mr Luxon hoping for a second term for his conservative coalition, and Mr Hipkins seeking a return to office.
The call means New Zealanders are set for a 10-month election campaign, which given economic and political frustrations, may feel like a bloated pregnancy.
National has already revealed the slogan - "fixing the basics and building the future" - a nod to his government's many reform programs, including education, planning and public service cuts.
The biggest hurdles to the coalition's re-election appear to be the economy, and Mr Luxon himself.
New Zealand's economy is stuck in a post-pandemic slow lane, shrinking in three of the last six quarters, with unemployment rising to a nine-year high of 5.3 per cent.
Kiwis haven't warmed to Mr Luxon, the 55-year-old Air New Zealand boss, who has the worst net popularity of any first-term prime minister in recent history.
Still, Mr Luxon struck an upbeat note when announcing the election date in Christchurch on Wednesday.
"The economy is recovering, and National's plan to fix the basics and build the future is delivering results for you and your family," he said.
"Now is not the time to put all of that at risk in a recovery like the one that we're experiencing now."
Mr Hipkins, who led New Zealand for 10 months in 2023 after Jacinda Ardern resigned as prime minister, is eyeing a historic win.
A Labour win would be the first time Kiwis have tipped out a first-term government in more than half a century, and the first time in 86 years a prime minister has won back power after losing an election.
Speaking at his party's own retreat in Auckland on Wednesday morning, Mr Hipkins said he would be arguing "better is possible" than the current coalition leaders.
"New Zealanders face a very clear choice at this year's election, between a government that's offering more cuts, more division and more negativity," he said.
"Or a change of government to a government with a positive vision for New Zealand's future."
Labour's signature policy to date is to introduce a capital gains tax on property (exempting family homes and farms) to fund a "Medicard" system which would pay for free GP visits.
That policy, along with Labour's "Future Made in New Zealand" slogan, appear to be copycat moves in an attempt to emulate Australian Labor's successful federal campaign last year.
Mr Hipkins also invoked the emigration to Australia on Wednesday.
"Last year, a record number of New Zealanders gave up on New Zealand and left the country looking for opportunities that should be available here in New Zealand," he said.
"That is an indictment on Christopher Luxon's leadership and it's an indictment on his government."
A tight election is likely, with respected pollsters tipping both a National-led government and Labour-led government in recent months.
In all likely scenarios, the major parties will need the support of minor parties to form government.
In National's case, that would mean support from its current coalition members: right-wingers ACT and populists NZ First.
NZ First is experiencing a jump in popularity, with veteran leader Winston Peters embracing an anti-woke platform popularised by Donald Trump.
Labour would need help from at least the Greens, and possibly also the scandal-hit Maori Party.
In 2023, National won 48 seats and after six weeks of coalition talks, partnered with ACT's 11 and NZ First's eight MPs to form government.
Without the enduringly popular Ms Ardern, Labour slumped from 62 seats to 34 in the 123-seat parliament.
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