I wanted to try restarting a thread on NZ investing/retiring. Are there any kiwi resident FIRE'd or close to FIRE'd mustachians out there in Aotearoa?
After the takeover by the barbarians in the US, the issues about healthcare, poor schools and guns everywhere are starting to be a concern. I'm super fortunate that an option post-FIRE is to return to NZ. I'm a kiwi who's been living and working overseas almost 30 years, and recently was for many years in the USA, so have the magic social security number and (cue sound of angelic choir) a US Vanguard account, but no green card/US tax liability.
Looking at the rules for NZ I'm quite encouraged:
- tax free status on all overseas earnings for the first 4 years. Sweet.
- after that, pay normal NZ income tax rates against an assumed 5% return on your overseas stocks, and if more earned than 5% you win. If less, pay the lower amount. Just no deductible losses allowed.
- no capital gains taxes except a new one they've put on on investment property owned less than 2 years (or if your investment is overseas, you get that combined assumed 5% income described above that covers dividends and cap gains)
- reasonable taxes* (amounts in ~US$):
0 - 10,000 10.5%
10,000 - 34,000 17.5%
34,000 - 50,000 30%
50,000 + 33%
Thus, a US$1 million portfolio sitting in Vanguard would generate taxable income of NZ$71k under the 5% rule, resulting in a tax bill of NZ$14.3k for an average tax rate of 20%. Against that I could also deduct any US taxes paid.
* Twenty % tax?!? WTF? Plus 15% goods and services tax on everything I buy too. I know, in the USA I could get away with zero federal tax on that. BUT, I'd be liable for 4.5% state tax, and that NZ$14.3k (US$10k) buys us free health care, free accident liability insurance and free quality schooling.
With a freehold house, I'm figuring $1100 a week post-tax should be enough to FIRE?