As Property Managers we sometimes get asked about rental property tax, and ways to avoid it. Owners often view tax as a bad thing, really tax is an indication of profit, which is not a bad thing (not to mention tax is re-invested in your economy). There are many ways to reduce your tax, like investing in maintaining (repairs and maintenance, not improvement) certain aspects of your rental property, hiring a Property Manager to take care of your property (since the GST on a Property Managers fees are deductible, as are any advertising costs of available property for rent), borrowing more and investing in a second property etc.
Depending on your investment strategy, if your paying tax and would rather not, I suggest taking stock of your rental properties condition, If you're a long term investor then keeping your property weather tight, and well maintained (therefore more attractive to quality tenants,) should be a priority. Also consider the implications of a future NZ rental property WOF scheme, would your property meet the code?
Here is a short NZ herald opinion piece you may be interested in:
Here is the IRDs page about Property tax whats deductible and whats not:
(As always, a good Accountant is advisable!)