Chris Hipkins Reverses Labour Policy on Landlord Tax Deductions

Labour leader Chris Hipkins announced that if elected in the November 7 election, the New Zealand Labour Party will allow residential property investors to continue deducting mortgage interest as a tax expense. This decision reverses a previous party policy of phasing out these deductions to cool the property market and contradicts years of criticism against the current coalition government's 2024 reinstatement of the policy.

Hipkins stated the reversal aims to prevent landlords from having an excuse to increase rents for tenants already struggling with the cost of living, though he acknowledged that interest rates and wage growth are the primary drivers of rent. To offset the loss of revenue, Labour intends to focus on implementing a capital gains tax. The policy shift comes as the government's current settings are forecast to cost 2.8 billion dollars over four years.

Opponents and allies reacted sharply to the announcement. New Zealand National Party campaign chairman Simeon Brown condemned the move as rank hypocrisy and an eleventh-hour u-turn, arguing it exacerbates a projected 18 billion dollar funding gap in Labour's economic plans. ACT New Zealand leader David Seymour called the move a victory for common sense and affordability, claiming the original policy had increased rental costs. Meanwhile, Green Party co-leader Marama Davidson criticized the shift, asserting that only the Greens will properly tax the super-rich.