New Zealand · Tax regime
Transitional Resident Temporary Tax Exemption
Long-standing regime, unchanged in 2025–26. What changed around it is the FIF regime that bites when it expires: the Revenue Account Method was enacted in March 2026 with effect from 1 April 2025, and Budget 2026 (28 May 2026) proposed raising the FIF de minimis from NZD 50,000 to NZD 100,000 and extending RAM to all NZ taxpayers — proposed only, in an omnibus bill expected around August–September 2026, not yet law.
For roughly four years New Zealand ignores almost all foreign income — including FIF and CFC attributed income, offshore dividends, interest and rent. Then it stops, and the FIF regime begins taxing an offshore share portfolio on a deemed 5% of market value every year whether or not a cent was distributed or realised. The exemption is once per lifetime and cannot be restarted.
Qualifying routes
no application, no fee; applies automatically to anyone who has not been a NZ tax resident at any time in the preceding 10 years
The facts
- Total landed cost
- No cost. The exemption is automatic; the expense is the advisory work needed to use the window properly and the tax that starts once it closes.
- Physical presence
- Governed by NZ tax residency itself: 183 days in any 12-month period, or a permanent place of abode in New Zealand
- Family
- assessed individually — each family member qualifies or does not on their own 10-year history
- Permanent residency
- not applicable — this is a tax regime, not an immigration status
- Citizenship
- not applicable
- Language test
- not applicable
- Dual citizenship
- Permitted
- Requirements
- become a New Zealand tax resident (183-day rule or permanent place of abode)not have been a NZ tax resident at any time in the previous 10 yearsnot have previously used the exemptionNZ-sourced income remains fully taxable throughout
- This is the FIF trap, and it is the reason New Zealand's 'no capital gains tax' headline misleads. Once the exemption ends, the Fair Dividend Rate method taxes 5% of the market value of a foreign share portfolio annually as deemed income at rates up to 39% — a roughly 1.95% annual wealth tax on offshore equities, payable in a year the portfolio may have fallen.
- Foreign employment and personal services income is NOT exempt, even during the window. Founders who keep drawing offshore salary are taxed from day one.
- The exemption ends 4 years after the end of the month in which NZ residency begins — not 4 tax years. Families routinely miscount and lose months.
- It is once in a lifetime and it is fragile: including exempt income in a return, or claiming Working for Families tax credits, terminates it early for the whole period.
- It cannot be paused. It runs whether or not the family is actually using it, so arriving 'to test the water' burns the asset.
- The Revenue Account Method softens FIF for some — 70% of the realised gain taxed rather than deemed income — but as enacted it reaches only unlisted foreign shares acquired before residency, for people who became resident on or after 1 April 2024 after 5+ years away. Listed portfolios are still on the deemed-income treadmill unless the Budget 2026 expansion passes.
- The NZD 100,000 de minimis is PROPOSED, not enacted. Anyone planning around it today is planning around a bill that has not been introduced.
- New Zealand trusts are not a workaround: the trustee rate has been 39% since April 2024, aligned with the top personal rate.