Social media users have attacked Jacinda Ardern during a Facebook Live over the Government's latest housing announcement, saying the new plans won't help renters.

On Tuesday, it was announced that the Government would crack down on property investors to help first-home buyers get a foot in the door by assisting with deposits and expanding the property investment tax. As part of the plan, the Government decided to offset tax deduction losses on rental property mortgage interest rates.

Later on Tuesday evening, the Prime Minister gave an update on Facebook Live to explain the new housing regulations.

She said while there is no "silver bullet" to fixing New Zealand's housing issues, there are things the Government can do to make a difference to the housing crisis.

"We know that a lot of the heat that's in there at the moment is from those who already own homes, they aren't just looking for a home for themselves, and are those who you could classify also as speculators," she said.

"So if we know that that's part of the issue, that was an area we wanted to target."

When explaining interest deductibility, Ardern said it was an interest that could be deducted from those who own an investment property or multiple investment properties.

"We've closed that tax loophole, and that will apply for anyone who's purchasing houses from March 27."

On whether this plan would increase rents, she said the Government is incentivising people to build new homes since the changes to the bright-line test and interest deductibility don't apply to this.

"That's really what we want people to do right now [build new homes], including if they're investors. There'll always be a place for investors in the New Zealand housing market, we just really want to channel them towards those new builds because that'll make a big difference for all of us."

But it was on this topic that many commenters disagreed with. Many said closing tax deductibility will drive up rents - something which property investors have threatened to do.

"This was just not the right move to fix the housing problem and it can only make renting worse as the loss is passed on to renters," one said.

"So taxes get passed onto renters and it becomes harder for them to save. Prices will go up even further. You can't tax people into prosperity," another wrote.

Interest on loans for properties bought before March 27 can still be claimed as an expense, but the amount someone can claim will be reduced over the next four years until it is completely phased out by April 1, 2025.

One person, who says they are a landlord, also believes this new policy won't help renters.

"As a landlord I am considering selling my property in 2025 and I know a few other landlords will do this," they say.

Some renters say they're concerned that if rents do rise, they won't be able to buy a house.

"My rent increased by $50 / week after the [COVID-19] rent freeze. Due to this I have no doubt it's going to go up again. How am I supposed to get ahead?" one says.

"If my rent increases then I have no chance of affording a house. How does this help?" another says.

One commenter suggested introducing capping rents since landlords "exponentially" increase prices "just because they can".

Appearing on The AM Show on Wednesday morning, Finance Minister Grant Robertson said closing the interest deductibility "loophole" will make a fairer housing market.

"There's a tax loophole that's been exploited by speculators and investors that homeowners don't get to use, and it is making things more unaffordable for first-home buyers," he said.

But Robertson said closing this won't "necessarily" push prices up because renters have the option to "go looking elsewhere" if landlords hike the rent too far. 

"The rental level is a product of demand and supply... and people's ability to pay," he said.