Hi all, my wife and I are likely to settle in NZ (her home country) after we FIRE and slow travel for a bit. I'm from the US so all of my investments will be considered foreign for the purposes of FIF. I was initially concerned that the tax would throw a wrench in my FIRE plans, but after doing a bit more research and thinking about it, it's probably not too much different than what I would pay in taxes in the US post-FIRE, especially factoring in NZ's universal health care. If any kiwis out there are interested in rekindling this discussion, I have a couple of questions about the topics in this thread:
1) Any updates on investing in NZ? Is Smartshares still the cheapest of the easy options? I obviously have a US-based brokerage and bank account, so I'm guessing I'll just stick with that after moving (assuming I can), but it's good to know that NZ-based options have been slowly improving.
2) My understanding of FIF is the following: say my portfolio is worth $1.1m and the market is up 10% that year (assume no withdrawals for simplicity). I would pay taxes on $50k (5% of the starting value of $1m), which works out to about $8k based on NZ's current marginal tax rates assuming I earn no income outside of this portfolio. I would pay less or nothing if the market returns are less or negative. Did I miss anything about the FIF tax? If not, that seems like a reasonable and manageable tax burden to me. I'll have to factor it into my expenses so as not to mess up the SWR, but otherwise it shouldn't affect my FIRE plans unless I'm missing something.
3) How should I make the most of the 4-year new resident tax exemption? I'm guessing we can use that time to consider a house purchase, which would bring a large chunk of our portfolio on-shore. But I don't have the same affinity for owning real estate that many kiwis appear to have. I noticed that renting in the Auckland area is much, much cheaper than homeownership (almost half the weekly expense in some instances) and wouldn't want to buy into that type of situation. Since our settling in NZ is probably 4 years off and we'll have that 4-year tax exemption, maybe the market will normalize a bit in the meantime. If not, we'll probably remain renters. Any other considerations during the exemption?
4) More generally, anything else to consider from an investment standpoint? I'm really excited about our long-term plans to live in NZ, but want to make sure I've thought through the boring logistics of the transition to make it as smooth as possible.
Thanks!