ACT leader David Seymour pledges to abolish loss ring-fencing for rental properties

ACT is promising to abolish loss ring-fencing for rental properties, leader David Seymour saying the current settings mean legitimate losses by landlords can "not be offset when cashflow is tightest, forcing landlords to wait until a property became profitable."

“Removing ring-fencing will improve the viability of rental investment, including investment in new homes," Seymour said on Wednesday. 

He said residential rental losses incurred from the day the policy takes effect could be offset against other taxable income. 

"This will apply to existing homes and new builds. Losses already ring-fenced will remain subject to the existing rules."

It would reduce government revenue by $264 million in its first year, rising yearly up to $303m in year four. Over the forecast period it would cost $1.1 billion. 

“Expect the usual cries of ‘tax cuts for landlords’," Seymour said. 

"Labour played the same cynical game when the Government restored mortgage interest deductibility, yet with ACT in Government and rents flatlining, it's renters who have reaped the benefits. Nearly three years on, Labour has come to its senses and decided not to reverse ACT’s change."

He said the policy would bring tax relief "forward for losses that would eventually be deducted under the current rules". 

"It doesn’t increase the total deduction. But some losses may never be used, and earlier deductions reduce government revenue in the meantime. So, we can’t say the policy has no fiscal cost."

ACT's fiscal plan promised a $12 billion cut in government debt in four years, $10b cut from the public service and a bigger surplus than currently forecast. 

Read the fiscal plan here.

Labour released its fiscal plan earlier this month, promising to retain the forecasted return to surplus in 2028/29 and to keep the operating allowance at the $2.4b set at Budget 2026. National is expected to release its fiscal plan in the coming week.