If you live and work overseas but rent out your New Zealand house, the IRD is proposing to change the rules to draw you back into a New Zealand tax liability. Your view?

Just another reason to use Trusts

I think a practical, but hypothetical scenario might help readers understand the implications of this change.

Consider Sally Anne, a highly qualified nurse who has a home in Auckland that is rented out.  After mortgage interest it makes about $1000 per year.  In the past she has paid N.Z. tax on that $1000 as a non resident.

But Sally Anne earns the equivalent of NZD300,000 in Saudi Arabia and pays tax of 5% on her wages. 

With this change Sally Anne would pay tax on her world wide income, but get a credit for the tax paid in Saudi Arabia on that income.

The N.Z. tax on her salary would be about $90,000, less the $15,000 Saudi tax paid;

Net result; pay Peter Dunne $75,000.

Sally Anne and expatriates like her would be highly pissed off.

More money for the Accountants and tax lawyers, certainly..

We could extend this analogy to ownership of other NZ assets as well, and tax every one who has invested in NZ, in some way or other...It is only the ordinary individuals who will be penalised, others hiding behind companies and entities will get away scot free, always.

When you are short of money, you go looking for it everywhere....and even create situation where there is no escape !!!

welcome to the ever rising Goverment Funding shortfall......property ownership is not going to be such a good idea after all.....there is nowhere to hide !!!

western economies will be facing deficits for the next decade or two....think where they will extract revenue the most from !!!

The maintenance of infrastructure/services never seems to get a mention when people grumble about paying taxes. If you own a home here, the roading up to your drive has to be paid by someone. Access to your property is sustained by taxes, should you not share in that responsibility even if you are away? Regardless of whether it is a home or a business, you benefit from the common pool. It doesn't matter whether it is rates or income taxes, no one wants to pay it.

The emergency services that might show up at your place while you are away to put out a fire- they need to show up to work every day even though it might not be your house this time or the next. If they were not there, and you did happen to have a fire, would you be willing to coordinate the services from wherever you are, halway around the world, and pay the astronomical one-off fee yourself? If you could even find such services for hire in the absense of such publicly maintained services.  SO high are the expectations for public benefit, and so low is the willingness to contribute to the common fund, that the inevitable result is the constant degrading of both infrastructure and public services. If everyone thinks they are above contributing, then the great improvements that have been institutionalized around the world over the 20th century will be gone. They didn't magically appear and they won't magically keep going without constant support from everyone, not just the suckers who still believe in civic duty.

The USA expects every one of their citizens around the world to account for their income, no matter whether they hold property or business in the US or not. IRD is simply trying to get people with capital in NZ to pay a reasonable share for the maintenance of services which give that capital the value it has. Without the infrastructure and services provided by NZ, the houses, and businesses are not worth much. It isn't taxing people who live elsewhere and do not have property or businesses here. That seems pretty fair to me.

What if the property is in a Trust?

Youv'e seen nothing yet, I am relaibly informed that Possum head has other tax plans:- Fly Air NZ  anywhere worldwide and you are deemed a NZ residnet taxable on your worldwide income, failure to pay will require Air NZ to repatriate you to NZ  and be held in custody on Auckland Island pending payment plus an accomodation cost of your stay.Next will be Fornication duty with a deemed minimum weekly indulgence of 7 at $10 each, politicians and beaurecrats will be exempt as they are all Eunuchs - result govt debt eliminated quick smart.

PS Father Christmas will be calling on us all 25/12.

So you move to Oz and join the other 50,000 expats due to the dire employment situation in NZ,.You then contribute to the Australian tax system but unfortunately must hand back some of your hard earned ozzie $'s due to the repercussions of the governments inadequacies which have contributed to loss of tax receipts collected by Mr Key?

Simple solution for the government............penalize with new ex-pat property tax for having the audacity to leave Gods Own!

They should split by citizenship.



You citizen here, you pay part your income's tax here.

 

sole NZ citizenship: 100% of income taxed at NZ rate.

2 countries citizen : 50% of income as defined taxable income by NZ rules, taxable here.

3 countries citizenship: 33% of income as defined taxable income by rules, taxable here.

etc



You the citizen, always your responsibility to file.

You no like, then renounce local citizenship & perks (pro rata).



We are no longer in the age of paper and snail mail.

These records are on file and not hard to record.



You want multiple citizenships, then that's the price; and no longer can the US/UK/Aus expect the tax kickbacks.



Same goes for franchises and multinationals.  Foreign fees (consultations etc) are profits made by NZ based companies and shouldn't be deductable for purposes of NZ tax.   The recovered cost will put them on a closer level playing field.

And again taxes for such businesses...the local profits mean local tax rates and rules.

 

The IRD's proposal  like most of these things is a drag net concept. They are aware of who they are targeting and just who is taking full advantage of the lax foreign ownership  loopholes by those claiming to be N.Z. resident.

 So here we go again, I'll say it. 

A Chinese National I am familiar with has residency status but lives and does his business in China. Now ,he bought Two townhouses back to back in Epsom, then two of a block of three in Epsom,then a ribbon block of thee......in Epsom, all within a radius of two kilometer.

 All the properties are occupied by Chinese persons, I can only assume organising their citizenship while their children are attending the local shool /s.

 Now ultimately where do you suppose the profits of his labours are being repatriated to..?

Or if he has geared them , he's operating a double bonus....thanks Olly..!

 So in a searh for some kind of rational solution to a problem of sucessive Administrations making through piss poor OIO / foreign investment policy, they are trying to close  the doors after inviting the  buglar in.

The irresponsibilty of our foreign investment policy , geared to maximise offshore money input (a lot of it dirty) is coming back to bite the short sighted greedy bastards in the ass.

 The downside is, it's a one pantsuit  fits all proposal as usual by the frustrated revenue collectors capturing genuine citizens  of N.Z. origin or those who really want to assimilate to become New Zealanders.