New Zealand · Tax regime
Transitional Resident Temporary Tax Exemption
This is a long-standing regime and it has not changed in 2025-26. What has changed is the FIF regime that takes over once it expires. The Revenue Account Method was enacted in March 2026, with effect from 1 April 2025. Budget 2026, delivered 28 May 2026, proposed raising the FIF de minimis from NZD 50,000 to NZD 100,000 and extending RAM to all NZ taxpayers. That proposal sits in an omnibus bill expected around August-September 2026 and is not yet law.
For roughly four years, New Zealand ignores almost all foreign income. That includes FIF and CFC attributed income, offshore dividends, interest and rent. Then it stops. 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
There is no application and no fee. It 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 real expense is the advisory work needed to use the window properly, and the tax that begins once it closes.
- Route type
- Tax regime, not a visa
- 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, based 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)You must not have been a New Zealand tax resident at any time in the previous 10 years.You must not have previously used the exemption.Any income sourced in New Zealand remains fully taxable throughout.
- This is the FIF trap, and it explains why New Zealand's claim of having no capital gains tax is misleading. Once the exemption ends, the Fair Dividend Rate method taxes 5% of the market value of a foreign share portfolio every year as deemed income, at rates up to 39%. That works out to roughly a 1.95% annual wealth tax on offshore equities, payable even in a year when the portfolio has fallen.
- Foreign employment and personal services income is not exempt, even during the window. Founders who keep drawing an 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 tax return, or claiming Working for Families tax credits, ends 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. It taxes 70% of the realised gain rather than deemed income, but as enacted it only reaches unlisted foreign shares acquired before residency, for people who became resident on or after 1 April 2024 after 5+ years away. Listed portfolios stay 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.