Hello
We are New Zealanders, looking for our next adventure. Please be gentle :-)
As part of considering where we might live I came across a potential tax advantage for Kiwis moving to Australia… It seems particularly relevant for the FI/RE community who (like us) generally live off index funds .
My understanding is that: as an NZ Citizen, if you move to Australia you receive a Special Category Visa (SCV). This is technically a “temporary visa” and means you are eligible to be a “temporary resident” for tax purposes.
There can be some tax benefits for New Zealand citizens living in Australia who are considered temporary residents. These benefits include:
1. Lower tax rates on their Australian income: Temporary residents are only required to pay tax on their Australian-sourced income (e.g. wages and salaries).
2. Exemption from capital gains tax on their foreign assets: Temporary residents are generally exempt from paying capital gains tax on assets they own outside of Australia.
3. Exemption from the Medicare Levy: Temporary residents are exempt from paying the Medicare Levy, which is a tax on most Australian taxpayers that helps fund the public health system.
Based on my few hours of research - and I’m not a tax expert - my understanding is that this means you wouldn’t have pay any Australia tax on passive income earned from sources outside of Australia (I.e. interest and dividends) nor any capital gains tax on sale of those same investments.
As an example, if you were to be invested directly in US Equities via a IBK, say VOO - you wouldn’t have an obligation for NZ tax (provided we cease to be Nz tax residents), and no obligation for Australian capital gains tax on sale or any income tax on dividends (other than those withheld in the US).
I’m wondering has anyone else looked into this and come to a same/different conclusion? Even better if you have and then taken advantage of it and can share your experience.
Thank you
