Interest Deductibility, CGT, and the 2026 Landlord Vote

Policy update, 13 October 2026: National's latest fiscal plan, released on 12 October, promises no new taxes and says tax relief would only be considered after the books return to surplus. ACT's 11 October plan also prioritises balancing the books and promises no new taxes; it does not make a present-day landlord income-tax rate cut. NZ First has since proposed reducing the company-tax rate from 28% to 20% for businesses with turnover of $30 million or less. The announcement does not explain how every property-owning structure would qualify, so the calculator does not apply that rate to landlords' rental income. Labour still proposes its 28% tax on investment-property gains from 1 July 2027 and says it would make no further changes to residential interest deductibility. Labour has also signalled tenancy-law changes, including removing no-cause terminations, but has not yet published the details. Opportunity's proposed land tax remains in its platform, but it is not one of the five bottom lines it published for coalition support; its leader has said pausing tax reform could be considered in return for other significant policy gains, according to an 8 October report. These are proposals and announcements, not enacted law. See National's fiscal plan, ACT's fiscal plan, NZ First's company-tax announcement, RNZ on Labour's proposed tenancy changes, and Opportunity's coalition bottom lines.

The short version: The main confirmed landlord tax differences remain Labour's proposed 28% tax on investment-property gains from 1 July 2027, the Green Party's proposed removal of interest deductibility and longer bright-line period, and Opportunity's proposed annual land tax. National and ACT have published new fiscal plans without changing the landlord tax settings modelled here. NZ First has proposed a lower company-tax rate for some businesses, but has not clarified how property-owning companies would qualify, so that proposal is not applied to rental income in the calculator. These positions are proposals, not current law, and the 13 October update below links to the latest announcements.

I've spent the last few years building RentManager for landlords who run one to four properties themselves, without a property manager or an accountant on retainer, and every election cycle the same question comes up in the emails I get: "what does this actually mean for me?" Most coverage of election tax policy talks in aggregate revenue figures or ideological framing, not what it does to one person's mortgage-and-rent spreadsheet. So this year I pulled together every party's actual stated policy, with sources, and built a calculator so you can run your own numbers rather than trust an example that isn't your situation.

What Is Each Party's Current Policy on Landlord Taxation?

For the tax settings modelled by the calculator, the policy notes below were reviewed on 21 October 2026. The current-law figures remain the baseline wherever a party has made no confirmed change to that specific setting.

• National - its 12 October fiscal plan promises no new taxes and says it would consider tax relief only after the books return to surplus. No change to the rental tax settings modelled here was identified.
• ACT - its 11 October fiscal plan prioritises balancing the books with no new taxes. It says lower, flatter taxes could follow, but makes no present commitment to change the landlord tax rates modelled here. The previously stated 39% to 33% top-rate ambition is not a confirmed 2026 commitment.
• NZ First - the landlord interest, personal-bracket, land, capital-gains and bright-line settings in this calculator remain at current law. NZ First has separately proposed a 20% company-tax rate for businesses with turnover of $30 million or less. The announcement does not explain eligibility for every property-owning structure, so this proposal is not included in the individual landlord calculations.
• Labour - has confirmed a flat 28% tax on investment-property sale profit from 1 July 2027, with the family home excluded. On 21 September it ruled out further changes to residential landlord interest deductibility if elected. In October it signalled changes to tenancy law, including no-cause terminations, but the details were not published as at 13 October.
• Green - has confirmed the removal of 100% mortgage interest deductibility, a new top tax bracket of 45% from $160,000, an extension of the bright-line test from 2 to 10 years, and an annual 2.5% wealth tax on individual net worth above $10 million ($20 million as a couple), with the family home exempt.
• Opportunity (formerly branded TOP) - its platform proposes keeping interest deductibility while replacing the bright-line test and any capital gains tax with an ongoing 1.75% annual tax on urban land value (0.5% rural), alongside a $19,400 annual tax-free Citizen's Income per adult. The land tax is not one of the five bottom lines it published for coalition support. Its leader said pausing tax reform could be considered in return for other significant policy gains, according to an 8 October report. That is a conditional bargaining position, not a withdrawal of the platform proposal.

Latest landlord-specific update, 21 October 2026: ACT has proposed allowing residential rental losses to offset salary or other taxable income, instead of keeping those losses ring-fenced to rental income. RNZ reported ACT's estimate of a $264 million first-year Crown cost and $303 million by year four. National has said it does not support the proposal. This is not current law, and the calculator does not model it because its standard example has positive rental profit and does not calculate a personal salary offset. See RNZ's 15 October report and the NZ Herald report from 16 October.

Every one of these positions can change before polling day, and none of it predicts who wins or what a coalition negotiates afterward - see the note at the top of the calculator below.

What Is the History Behind Labour's Interest Deductibility Position?

The policy has changed more than once, which is why a dated timeline is more useful than treating any party statement as permanent. Labour's 2021 changes phased out interest deductibility for existing residential investment properties. After the 2023 election, the National-led government restored the deduction in stages, reaching 100% from the 2025-26 income year. During the 2026 campaign Labour first left open whether its proposed capital gains tax would be accompanied by another restriction on interest. Chris Hipkins then described a full removal as unlikely on 27 August, while leaving a partial change open. On 21 September, Labour gave the clearer answer: it would make no further changes to the landlord interest-deduction rules if elected.

The latest announcement is reported by RNZ in its report on Labour ruling out changes. For the preceding stage of the debate, see the NZ Herald report from 27 August, which recorded the earlier uncertainty about a partial change.

What Happens If My Property Is Worth Less Than I Paid When Labour's CGT Starts?

Labour's proposed 28% tax is not intended to tax a gain that exists only because a property's value recovered from a loss at the July 2027 valuation date. For example, if a rental was bought for $1 million, valued at $800,000 on valuation day, and later sold for $850,000, the relevant policy explanation is that the owner should not be taxed on the $50,000 recovery. The proposed median rule uses the middle value of the purchase price, the valuation-day value, and the sale price, so the tax calculation does not create an artificial gain. The family home remains excluded, but a second home or rental property can be within scope.

This detail comes from the NZ Herald's CGT explainer. It is a proposal rather than current law, so the valuation method and any legislation enacted after the election should be checked before relying on it for a sale decision.

How Would Opportunity's Proposed Land Tax Affect Landlords?

Opportunity's proposal is relevant to landlords even though it keeps interest deductibility. It would replace the bright-line test and capital gains tax with an annual tax on land value: 1.75% for urban land and 0.5% for rural land. That is a recurring holding cost, not a tax only payable when a property is sold. Opportunity has described a 10-year transition, with the first couple of years used to establish the system before the rate rises over time. The proposal is therefore not comparable to Labour's 28% sale tax: one targets annual land ownership, while the other targets the gain calculated at sale.

The proposal and transition detail are discussed in Interest.co.nz's interview with Opportunity leader Qiulae Wong. Both National and Labour have ruled out working with Opportunity on this policy, so include it in a scenario comparison, not as a likely current-law outcome.

How Much Does Removing Interest Deductibility Actually Cost a Landlord?

This is the single biggest lever in the whole comparison, and it works differently to how most people expect. Removing interest deductibility doesn't change what a landlord actually pays their bank each year - the mortgage interest is still a real cash cost either way. What changes is whether that cost reduces taxable rental profit.

Take a $2 million portfolio across four properties, 40% equity, a 5.5% mortgage rate, a 5% gross rental yield, and 25% operating costs excluding interest. Under current law, with full deductibility, that portfolio nets roughly $9,000 a year in cash profit, taxed at a landlord's marginal rate. Remove the interest deduction and nothing about the cash flow changes - the same $66,000 in mortgage interest still leaves the landlord's account every year - but the taxable profit jumps from $9,000 to $75,000, because the interest can no longer be offset. Stack that on a $150,000 personal income and tax it at the Green Party's proposed rates, and the tax bill comes to roughly $32,600 a year, on a portfolio that only generates $9,000 in actual cash profit. The landlord ends up paying tax out of pocket, not out of rental income.

What About the Wealth Tax? Does It Actually Affect Most Landlords?

No, for almost everyone reading this. Only the Green Party has proposed a wealth tax; National, ACT, NZ First, Labour and Opportunity have not. The Green policy applies a 2.5% annual tax to net worth above $10 million as an individual, or $20 million as a couple, with the family home excluded entirely. A landlord with a handful of rental properties and, say, $800,000 in equity across their portfolio is nowhere near that threshold. The real cost to a typical landlord under the Green Party's package comes from the interest deductibility removal and the new top tax bracket, not the wealth tax that gets most of the headlines.

What Happens to Capital Gains If I Sell?

This only matters at the point of sale, and it depends entirely on which party's policy applies at the time. National, ACT and NZ First keep the current 2-year bright-line test, so a property held longer than that owes nothing on sale under any of them. Labour's 28% capital gains tax applies regardless of how long the property was held, on gains accrued after 1 July 2027, with the family home excluded. The Green Party's extended 10-year bright-line test taxes a sale inside that window as ordinary income at their proposed rates, which could mean paying up to 45% on the gain rather than a flat 28%. Opportunity has no capital gains tax and no bright-line test at all - having replaced both with its ongoing land tax - so a sale under Opportunity's policy triggers no separate tax event on the gain itself.

Run Your Own Numbers

Every figure above uses a single illustrative example. Your own portfolio size, equity, mortgage rate, rental yield, and personal income will change the result, sometimes significantly. The calculator above lets you enter your own numbers and see the same six-party comparison, including the one-off tax on sale if you're planning to sell, calculated live as you adjust the sliders.

What If a Party Changes Its Policy Before the Election?

We'll update this article and the calculator above as parties confirm, change, or add policies that affect landlords between now and election day, and note what changed here. The numbers on this page were reviewed on 21 October 2026. This is a snapshot, not a forecast, and election-year policy moves quickly.

Bookmark this page, and share it with any other landlord it's relevant to. Every party's numbers will keep moving between now and 7 November, and having the current comparison on hand, for your own portfolio, is worth more than remembering today's figures from memory.

None of this is voting advice. It models the direct tax and cash-flow effect of each party's own stated property policy on a rental portfolio, nothing more, and nothing about a party's wider platform, its chances of entering government, or what it might negotiate away in coalition talks. RentManager NZ has no party affiliation, no conflict of interest, and was not paid by any party or candidate to publish this.

If keeping track of the numbers behind your own portfolio - rent, mortgage payments, and what's actually left after tax - is something you're doing by hand or not at all, register for a free RentManager account and let the property dashboard do that tracking for you automatically, on your own numbers, not the illustrative example above. You can also preview the rent-ledger demo.