Hipkins says CGT is Labour's only tax – but is he staying quiet on another increase?

Chris Hipkins claims the Labour Party will only introduce a capital gains tax and no other taxes if elected on November 7 but continues to stay quiet on whether his party will bring back a controversial property tax policy.

He’s also not saying whether reversing a “tax cut”, as Labour has repeatedly called National’s interest deductibility policy, amounts to a tax hike.

The tax attacks have ramped up again this week, with Hipkins accusing National of lying over Labour’s tax agenda and National countering by accusing the Labour leader of not being upfront about what his party is planning.

Hipkins was asked explicitly on Wednesday whether he could guarantee Labour would only introduce a capital gains tax and no other taxes. He answered “yes”.

But he won’t yet confirm whether Labour would restore interest deductibility restrictions for landlords, a move that would have the effect of increasing the amount of tax landlords have to pay.

Asked about interest deductibility in the context of Labour’s tax plans, Hipkins told the Herald on Wednesday that “isn’t a new tax” and the party would address its policy in its fiscal plan, though that is likely more than a month away.

Hipkins has previously said it is “unlikely” Labour would fully remove interest deductibility again, but left the door open to a variation, such as reducing the amount of deductible interest to 50%.

The Opposition party and its supporters have spent the past three years lambasting the Government for delivering “tax cuts for landlords” by allowing these property owners to deduct interest costs from their tax bills.

The Herald asked Hipkins three times whether Labour reversing those so-called “tax cuts” would be a tax hike. He didn’t answer, instead saying he would address questions at a later date.

“We’ll set out our own position on that in due course and then we can answer questions on it,” Hipkins said.

National’s finance spokeswoman Nicola Willis told the Herald that if allowing interest deductibility, as the Government does, was a “tax break, then reversing it is obviously a tax hike”.

“It’s very simple. I think this goes to why New Zealanders can’t trust Labour on tax, because actually they will create as much semantic space as they can for excusing and covering up tax rises.”

Labour leader Chris Hipkins. Photo / Mark Mitchell

In 2021, the Labour Government phased in restrictions to interest deductions on residential properties, meaning landlords with mortgages couldn’t deduct their interest from tax bills. The intent was to dampen investor demand and put less upward pressure on prices.

However, the move wasn’t supported by Inland Revenue, which said “additional taxes on rental housing are unlikely to be an effective way of boosting overall housing affordability”. While it could put downward pressure on house prices, it would also put upward pressure on rents and and may reduce the supply of new housing developments.

The coalition Government moved to reverse this when it came to power, at a cost of about $2.9 billion over the four-year forecast period. This has frequently been called “tax cuts for landlords” by Labour.

Hipkins told the Herald Herald this month that Labour was considering the plight of accidental landlords as it was weighing up its policy. These are people who purchased their homes at the peak of the market and haven’t been able to sell their properties for fear of realising large losses, instead turning to renting out their houses.

Labour is accusing National of lying in saying the party will implement more than just the capital gains tax. Hipkins says his party won’t implement any tax policies from potential coalition partners.

But National says Labour needs additional revenue to pay for its spending promises and could take up other tax policies to help.

National is pledging no new taxes if re-elected, though it could still increase some taxes or levies. It is still planning to introduce a bank levy next year, though this has previously been announced.

Jamie Ensor is the NZ Herald’s chief political reporter, based in the press gallery at Parliament. He was previously a TV reporter and digital producer in the Newshub press gallery office. He was a finalist in 2025 for Political Journalist of the Year at the Voyager Media Awards.