Property Investment

2 min read

Private property issue #44 - Jacinda's taxes gone?

Yesterday, Chris Hipkins was sworn in as PM after Jacinda Ardern served her resignation last Thursday. And many property investors are thinking: “What impact will it have on the property market?”


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Private Property – our weekly newsletter that gives you insights into what's happening in the NZ property market. Written by managing director Andrew Nicol. Sign up to receive this in your inbox every Thursday.

New Zealand has a new Prime Minister. What does it mean for property investors?

Yesterday, Chris Hipkins was sworn in as PM after Jacinda Ardern served her resignation last Thursday.

And many property investors are thinking: “What impact will it have on the property market?”

Big disclaimer: I'm not political. Opes is not political.

Some property investors vote for left-leaning parties. Some vote for parties on the right.


  • Property investment is political
  • And this week, investors have emailed me asking what the change of PM and the election means for them.

So here’s the data. (As usual, we’ll dig deeper than many other articles online.)

Will the higher taxes for property investors go?

Why does the election matter for property investors?

Labour brought in several taxes that have hurt property investors’ bank accounts. Specifically:

  • Interest deductibility rules that will cost some property investors $5,000 - $15,000+ per year
  • An extended bright line test that will cost investors 6-figures (in some cases).

If National gets elected, these taxes will likely go. The party has been vocal about removing them, and it’s still their policy on the National party website.

Scenario #1 – labour loses and is kicked out of office

There is no doubt Jacinda was Labour’s best campaigner. She is the first prime minister to win >50% of votes since 1951.

She had a high profile both here and internationally. And polls taken at the end of last year showed she was still the preferred PM for 29% of voters.

The latest polling from the Taxpayer Union Curia Poll (released this year) shows that Labour is on track to lose the next election.

Some people think they are now sure to lose without their star campaigner.

Picture 1

National will likely follow through and scrap these investor taxes if this happens.

But that’s not the only potential scenario.

Scenario #2 – labour will stay in government

While some say Chris Hipkins is not a strong campaigner (compared to Ardern). That doesn’t mean he’ll lose Labour votes.

Chris Hipkins was the only potential leader where:

  • more people said they were likely to vote for Labour compared to
  • people who said they were less likely.

25% said they were more likely to vote for Labour if Hipkins became leader. 18% said they were less likely to vote Labour. That’s a net positive 7% swing.

And a 7% swing in any poll would be game-changing.

On top of this, Hipkins could turn things around by dumping unpopular policies. (Unpopular according to data, not according to me).

The most unpopular policies are Three Waters and the TVNZ/RNZ merger.

If Chris Hipkins removes some of these policies, there’s a chance he could turn the polls around.

Will interest deductibility be dumped?

What’s my prediction for the election?

I don’t have one. We’re still 9 months away till the votes get counted.

But the key message is:

  1. While some people think National is sure to win … it will be a tougher fight than some expect.
  2. You shouldn’t bet that the interest deductibility rules will definitely be repealed

There is the possibility that National gets in, then decides: “Hmmm, we actually need the revenue ... we need those taxes from property investors for a bit longer.”

Interest deductibility isn’t dead yet.

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Andrew Nicol

Managing Director, 20+ Years' Experience Investing In Property, Author & Host

Andrew Nicol, Managing Director at Opes Partners, is a seasoned financial adviser and property investment expert with 20+ years of experience. With 40 investment properties, he hosts the Property Academy Podcast, co-authored 'Wealth Plan' with Ed Mcknight, and has helped 1,894 Kiwis achieve financial security through property investment.

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