Labour rules out changes to interest deductibility settings for landlords if elected

Labour leader Chris Hipkins has ruled out any changes to interest deductibility settings for landlords, if elected.The coalition government in 2024 reinstated landlords' ability to claim tax deductions for interest on residential investment properties.Opposition parties decried the government prioritising "tax cuts for landlords" which cost around $2.8 billion over four years.But Hipkins on Monday confirmed Labour would not change the policy, because it was committed to a capital gains tax instead."We did foreshadow when we announced a capital gains tax that that was changing our thinking around how we would look at interest deductibility in the future, and that has now been confirmed," he said."[Under Labour] landlords will ultimately be subjected to a capital gains tax when they sell their investment properties."If you were to make changes to interest deductibility, it would ultimately change then, potentially, the capital gains tax settings."Hipkins said he also did not want to risk landlords hiking rents, because people were already struggling to pay them.National criticises 'rank hypocrisy'National's campaign chair Simeon Brown questioned how Labour would pay for its policies without the additional revenue.He said the move demonstrated "rank hypocrisy"."After three years of attacking 'tax cuts for landlords' and blaming them for the cost-of-living crisis, Chris Hipkins has performed an eleventh-hour u-turn and decided to keep the very policy Labour has spent years condemning," he said."While this is welcome news for renters who were concerned about upward pressure on rents, it raises serious questions about what other taxes Labour is planning."