Dr Deborah Russell, Labour, Revenue Spokesperson 

I want to say at the outset that this was a good meeting, and it felt like we were listened to. That doesn’t mean we’ve changed Labour’s mind on everything; it would be crazy to expect that. It does mean that our views will be considered, mostly. 

We discussed the following topics: 

• Adjusting Labour’s CGT for inflation 

• Interest denial (removing interest deductibility) 

• Removing ring fencing for new builds 

• Changing tax treatment for investments which build on Healthy Homes 

Indexing CGT for inflation 

Under Labour’s current policy, capital costs can be offset, but there is no adjustment for inflation. We think this is unfair, because people will be taxed on nominal, not real, gains. It’s especially bad in the current high inflation, low capital gain environment. 

The bad news is this policy is now set, so there’s no chance of it changing pre-election. We’ll focus on getting change post-election, if Labour is in power. We think they should adopt the Australian position, which only taxes capital gains after costs and inflation. 

One positive. Dr Russell confirmed that anyone who is in negative equity at ‘valuation day’ (1 July 2027) will have CGT calculated on their purchase price, not the 1 July 2027 valuation. This removes the possibility that someone could end up paying CGT even when they’ve sold their house for less than they bought it for. 

Interest denial (removing interest deductibility) 

We can expect a decision on this policy in early October, after the pre-election fiscal update is released, which is on 26 September. 

The key point we put forward was that this is a very bad policy for tenants. It will put upward pressure on rents, act as a disincentive to improve properties, would likely reduce rental supply as people sell and that would further lower house prices. Which, incidentally, would render Labour’s CGT largely ineffective. 

There is, we believe, no reason for Labour to remove interest deductibility if they have a CGT. We think this is a politically defensible position, and we hope they adopt it. However, if they do go for it, we have argued they should keep interest deductibility for new builds, including any new build investments bought under Labour’s previous interest denial policy. Not doing so would kill investment in new rentals. 

Dr Russell isn’t the decider for this policy but will raise our points with the people who are – leader Chris Hipkins and finance spokesperson Barbara Edmonds. My view on this policy is that there is a good, data-based argument to be made against it and we hope Labour will listen. 

Ring-fencing & expensing 

We put forward two policies which we think will be positive for the rental sector and for both landlords and tenants. One is the removal of ring-fencing for new builds, the other is to allow the expensing of expenditure that would improve on Healthy Homes standards (e.g. double glazing, additional insulation) or reduce tenants’ cost of living (e.g. heat pump hot water cylinders, solar). 

Looking at expensing first, Labour has already proposed a policy which would allow expensing of up to $10,000 per item for small businesses, and Dr Russell confirmed this would apply to rental businesses. Big tick for that. It applies to items which are currently able to be depreciated, not capital items, which would leave out double glazing. We’ve asked if the tax treatment for double glazing could be changed to allow it as well as it’s a significant positive for renters which should be encouraged. 

On removing ring-fencing for new builds, Dr Russell asked us to send her a formal policy paper, which we will do. We’re pleased there is some interest in this idea. If you’re wondering why we’re only asking for it to be taken off new builds, it’s simply because there’s no way Labour could be seen to support a policy like that given their previous ‘no tax breaks for landlords’ position. However, a policy which gives new builds a better tax treatment is consistent with their desire to incentivise more house building and their exemption for new builds under their previous interest denial policy. 

Luke Somervell, President, Renters United 

We had a general discussion about the rental sector and sharing our concerns and priorities. Our meeting took place shortly after Renters United released the results of their Aotearoa Renters’ Survey 2026. It showed that half of respondents spend over 50% of their income on rent, 4 in 10 reported ongoing dampness or mould issues and 20% say they live in properties that do not comply with Healthy Homes standards. Here’s the 1News coverage of the survey. 

Now, like the surveys we do, the respondents were self-selecting, so the results aren’t statistically robust. You can’t say half of all renters spend half of their income on rent; you can only say that half of the people who completed the survey do. Nevertheless, the survey does highlight that there are plenty of people who find it hard to get good quality, affordable rental accommodation. And the key point is that this is what drives Renters United’s concerns, and their policy aims. It’s important we understand this. 

From our side, I wanted to ensure that Luke understood the impact that Labour & the Greens’ interest denial policy would have on renters. Luke has previously supported this policy in the media and expressed scepticism about the policy’s impact on rents, so I talked him through what mortgaged rental owners would have to do to keep afloat financially if this policy came back. Rents will rise; the only question is by how much. 

Did I convince him? I don’t know, but the important thing is we’ve had the discussion. One thing I realised from our discussion is that most people don’t know how much tax landlords pay, collectively. To be fair, dear reader, before you read about it in this newsletter, did you know that we paid $1.12 billion in tax in 2023/24? The average person, who only hears about “$2.9 billion tax breaks for landlords” in the media, could be forgiven for thinking we pay not much, if any, tax. That’s something we need to change. 

David Bainbridge-Zafar, Opportunity, Housing 

With Opportunity high in the polls and now much more likely to be in parliament and in a position of influence, it was high time we met with them. Luckily, I have relatives in Dunedin, which is where their housing ‘spokesperson’ lives, so we caught up for a coffee while I was visiting. I say ‘spokesperson’ as while that’s David’s policy area, I don’t think they’ve sorted the whole spokesperson thing yet. 

Unfortunately, they hadn’t released their housing policy in time for our meeting, so we weren’t able to discuss specifics, but we did have a good general discussion. We talked about Land Tax, which we now know won’t see the light of day in the next parliament having been ruled out by both National and Labour. Thanks to Opportunity’s ‘Citizens Income’, any increase in costs to rental owners from land value tax will be able to be passed on to renters, so the impact will be mitigated. Let’s say this isn’t my biggest policy worry going into the election from a property investment standpoint. 

On the housing supply side, I expect that Opportunity will broadly support the current direction being taken by the major parties. The details will be interesting though, for example how much will they support the current RMA reforms, Build to Rent or Fast Track for housing? 

On the Residential Tenancies Act side, expect to see higher Healthy Homes standards, and perhaps a different approach. I’m really guessing now as David didn’t give much away, but perhaps they would even support things like a rental warrant of fitness. 

One thing he did say is that the party would support evidence-led policy, regardless of whether it came from the left or right. If so, that’s a good thing. Ideology and idealism lead to policies like Labour’s Kiwibuild – nice idea but completely impractical and unachievable, as anyone in the sector would have told them. 

A comment like that reinforces the need for NZPIF to always have policies or proposals which are grounded in facts, backed up by data and supported by real world experience.