3200 (2024). Rt Hon Chris Hipkins to the Minister of Revenue

3200 (2024). Rt Hon Chris Hipkins to the Minister of Revenue: Will allowing landlords to deduct interest costs on their mortgages against rental income lead to downward pressure on rents, and if so, what will be the total decrease in rents due to this policy change over a five year period?

Hon Simon Watts: Allowing interest deductions for residential investment properties will remove a tax bias that is discouraging debt-financed investors from acquiring rental properties. This makes it less likely that leveraged investors will withdraw from the property market. This can increase the construction of new dwellings and, over time, reduce upward pressure on rents. As rent is dependent on a large number of factors both within and outside the tax system, it is difficult to quantify any decrease in rents attributed solely to the restoration of interest deductions for residential investment properties