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.