you get that advantage because you have been able to claim a depreciation expense on an asset that in effect, isn't being used up at all. That's why there might be a good case for not allowing people to claim depreciation on rental properties. Or indeed, on any buildings. Claims for other expenses should be allowed though. It's fair enough that people should be able to repair wear and tear, and repaint when necessary, and so on. That helps them to maintain the value of their asset. If we don't allow them to maintain the value of their asset, then the asset really would be used up over time. In effect, by allowing property owners to claim a depreciation expense, the government is underwriting investment in rental properties. People often buy rental properties because they think they are going to make a capital gain on them (untaxed in New Zealand). However, their cashflow becomes much easier to manage if they can put off paying tax. And that's what depreciation (on assets that are rising in value) enables them to do. Rental property owners are able to transfer some of the risk associated with investment from themselves, to government. I would like to see that change in tomorrow's budget. But if it does, then I think that in order to be consistent, the government will need to remove the capacity to claim depreciation on all buildings, not just rental homes. And if they do, I'm sure there will be howls of