The initial election results are in. The final results are about 2 weeks away.
Based on what we have so far, the current National, ACT, and NZ First coalition government holds 67 of 131 seats.
That’s more than the 66 needed.
But we still have about 14% of the votes to count. That’s why we don’t have a government locked in yet. (Though if you want to see who could be prime minister, Ed broke down the numbers on YouTube.)
Whoever ends up running the country, there were some big property policies on the table this election.
Now that we have the preliminary results, how likely is it that each of the big policies comes in?
I’m going to give my gut-feel percentage likelihood that each policy actually makes it in (over the next 3 years).
#1: Capital gains tax – 10% likely
This is the 4th time in 15 years that a capital gains tax has seriously been on the table.
Labour campaigned on one in 2011, then again in 2014.
Then in 2019, a government tax group recommended bringing one in. But Winston Peters was the handbrake that stopped it.
Now, in 2026, Labour brought it back to the table. It wants a 28% tax on the gains from investment and commercial properties, starting in mid-2027.
Some commentators like David Farrar (who polls for National) estimate about a 3% chance that Labour leads the next government.
But special votes have tended to lean left in past elections. So, let’s be cautious and say the chance is a bit higher than that.
If Labour do lead the next government, this policy is 99% likely to come in.
The day before the election, I would have said it was 50/50 we get a CGT.
Now, my gut feeling is that it’s about 10%.
#2: Removing ring-fencing (a tax break for landlords) – 8% likely
ACT campaigned on removing the 2019 ring-fencing rules.
This would mean that if you:
- make $100k through your job/salary
- but your investment property makes a $10k tax loss,
- you can get a tax refund of $3,300.
Under today’s rules you’d still get that deduction eventually. But ACT’s change means you get it much sooner.
On the current numbers, ACT would make up 19% of the government’s seats (13 of 67). They’ve got some bargaining power. But ACT is still a smaller partner, and both National and NZ First would both need to agree.
So I think it’s unlikely this policy actually makes it through. It would restart the whole debate about tax cuts for landlords.
I’d love to see it in, but I’m not going to get my hopes up. I give it an 8% gut-feel chance.
#3: Losing mortgage interest deductibility again – 2% likely
Back in 2021, the government changed the tax rules for property investors.
You couldn’t claim mortgage interest as a tax deduction.
Imagine your property didn’t have a mortgage.
Not as much money would be going to the bank, so you’d be making way more money.
So you’d pay way more tax.
But with this policy, you were taxed as if you didn’t have a mortgage. That’s despite the fact you still had a mortgage to pay.
The current government started changing the rules back in 2024 to what we have now.
But the Greens and Te Pāti Māori campaigned on switching the rules back again.
Labour ruled it out in September. It’s sticking with a capital gains tax instead.
Right before the election, I’d have given this policy about a 10% chance.
After seeing the preliminary results, I think it’s highly unlikely it comes in. But there is still a small chance.
#4: Land tax – less than 1% likely
Then there’s Opportunity Party’s land tax. This would tax the land underneath your own home and your investment properties.
On just one of my properties, it’d be about $160 a week in extra tax.
On the current results, Opportunity isn’t needed to form a coalition. But that could change after all the votes are counted.
Even still, the land tax is not one of Opportunity’s bottom lines for coalition negotiations.
Their leader Qiulae Wong said she never expected tax reform to happen overnight:
“I think it’s unfair for a new party like us to come in and expect that to have sweeping reform overnight. We need broader support from the public and from other parties to make meaningful change like that stick.”
So I give it less than a 1% chance over the next 3 years. But I wouldn’t be surprised if we’re talking about it again before the next election.
So, what happens next?
It’s been a busy few years for property investors.
We’ve had changes to interest deductibility, the bright-line test, tenancy rules … you name it.
But this time around, it looks like the rules might actually stay put. I put that chance at around 75% (source: my gut-feel).
And after years of rules changing back and forth, I don’t think many investors would complain about a bit of stability.
