Parliament has gone into urgency to ram through changes to the bright-line test in its housing package, unveiled this morning.
The government is doubling the length of time investors have to hold on to additional property to avoid paying tax when they sell, in a bid to cool the market.
Under the bright-line test, people pay their marginal tax rate on capital gains made on the sale of properties, other than the family home, bought or sold within a certain time.
That will be extended from five to 10 years for any houses bought after this Saturday.
The National Party said Labour was effectively turning the bright-line test into a capital gains tax - something it promised it would not do.
Leader Judith Collins accused the government of breaking its promise, and turning the Bright-line test into a "full-scale capital gains tax".
"The Labour Party has lied to New Zealanders. They promised New Zealanders that they were going to build 100,000 homes under KiwiBuild over 10 years - they built 700 over three years," Collins said.
"They told New Zealanders that there would not be a capital gains tax under their watch. They also told New Zealanders that there would be no increase in the bright-line test - they have lied on both counts."
The government will also remove the ability for property investors to offset their interest expenses against their rental income when calculating tax.
Collins said the suite of changes would make it harder for first-home buyers to get on the ladder and cause rents and house prices to soar even higher.
She said National could get behind the Housing Acceleration Fund, however it needed to see the detail.
"As usual [there is] no detail, no timelines, no targets. This whole announcement is just Kiwibuild mark two".
Collins said while increasing the income and house price caps for First Home Grants and Loans was a good move, these changes did not go far enough.
"The government has shown that they have no answer to anything, except to tax people more and to make promises with no targets, no detail, actually no delivery," she said.
ACT leader David Seymour said the five year bright-line test made no difference, but somehow the government thought 10 years was the magic number.
"It's a capital gains tax by stealth because they don't have the honesty to come out and say it. The government has been quick to blame ma and pa investors, it won't accept responsibility itself for the fact all its policies have failed for four years."
Greens co-leader Marama Davidson said the bright-line extension did not go far enough.
"We should actually remove any time limit on the bright-line test on the ability for investors to pay tax on the capital gain."
Davidson said investors were a massive part of the housing problem.
Legislation for other changes, including removing the ability of property investors to offset interest expenses against rental income, will be passed at a later date.
Those changes will also apply to eligible houses bought after this Saturday, but the tax changes will not actually take effect until 1 October.
There will be a four-year transition period for people with existing investment properties; they'll be able to claim less as each year passes, until 2025.