Pitched as removing what ACT calls one of Labour's renters' taxes, on the argument that costs placed on landlords flow through to tenants and that easing landlords' cashflow will support rental investment and new homes.

📋 ACT: Abolish Labour's Rental Tax, October 2026 →

What it does

• Ends loss ring-fencing for residential rental property, so losses incurred from the day the policy takes effect can be offset against other taxable income, such as wages.
• Applies to existing homes and new builds. Losses already ring-fenced stay under the current rules.
• ACT says the change brings deductions forward rather than increasing the total, but accepts it has a fiscal cost: revenue falls by $264 million in year one, rising to $303 million in year four, which is counted in its fiscal plan.
• The NZ Herald's worked example: an investor with a $10,000 rental loss and a $100,000 salary would pay tax on $90,000 instead of $100,000.
• Announced on 14 October 2026.

The debate

David Seymour said there is "no such thing as a tax on landlords that renters can safely ignore" and that the change levels the playing field with sole traders and commercial property investors, while predicting opponents would call it tax cuts for landlords. The Labour-led government introduced ring-fencing in 2019 to level the playing field between property investors and owner-occupiers, and the NZ Herald reported that 2018 advice from Inland Revenue and Treasury warned that offsetting rental losses against other income could help investors outbid owner-occupiers.