Simply can't afford to live in NZ

[ExPat]

Originally Posted by duane1x

You sound like a libertarian?

I was doing some Google searches on NZ tax and it appears that NZ does not have a capital gains tax at all. There are fine points to it for individuals, and I only scratched the surface but that should warm your low tax desiring heart. Apparently no corporate capital gains tax whatsoever. Here are a few links:

The 0% capital tax rate is what appealed to me initially about New Zealand and I'd still like to move there and quite possibly will move there in a few years after I cash out all my stock options and have enough money to buy a decent home and live off of interest income (kept offshore of course ;)

Expat

[selchie]

Hey, Duane, welcome back. I like your observation about money making in your first post on 1 May. I think council rates (NZ) take the place of property tax (US), at least so far as what they are used for (but I might not pass that one on a quiz).

Am I wrong in thinking that capital gains will be taxed as regular income in NZ? That could mean a higher payment than in the US (28% for cap gains?). Although all the taxation gyrations are good to be aware of, they nearly even out as far as I'm concerned. This may be because of living in California, where we pay State income tax in addition to Federal, plus we have sales tax.

Ex-Pat, I disagree with your comparison of a "primitive" vs "sophisticated" understanding of money, though mostly because it is simplistic. It is also condescending to those who simply cannot afford to put away a part of that $100 in your example. They may understand quite well that investing could make their money grow in the long run, but they have immediate bills to pay. Others might see extra money - or time - as an opportunity to share with others. As long as they're not standing with a hand out at your door, why should you care how they spend their resources?

Dawn, thanks for the shot of Jonie Mitchell.

[Dawn]

Joni Mitchell never lies!

[Taffy]

This isn't directly related to the money thing, but I found this snippet on the NZIS site, which pretty much sums up the one size doesnt fit all statement:

New Zealand is a small and distant country. For those accustomed to larger, more metropolitan societies this can come as a shock. Of all New Zealand?s cities only Auckland with a population of over a million, about 25% of the national total, would qualify as a major city. For many migrants, our other centres have more the feel of a country town and provincial towns often seem more like villages. If you love big city life, these features will not appeal. Our smallness is also reflected in other ways. The range of consumer goods is more limited and prices are sometimes higher. When compared with larger developed economies, New Zealand wage scales are also lower. This has to be kept in mind when comparing living costs which must be measured in terms of your New Zealand not your current salary. The opportunity to develop highly specialised skills is more limited. Standards tend to be more uniform, with few schools and no universities comprising an elite.

Although new technologies are constantly making it easier for us to keep in touch, quick overseas trips are not an option. Our closest neighbour, Australia, is still three hours flying-time away and overseas travel remains costly and time consuming. Divorce rates amongst migrants are high and distance from family and friends is often a contributing factor. If family and friends are important to you, this is something you?ll need to weigh carefully before choosing to settle here.

New Zealand is a new society. Although Maori settlement of Aotearoa goes back almost a thousand years, the cultural roots of other New Zealanders go back little more than 150. A rich sense of history and tradition is something you will not find here. Freedom from the past can liberate but for some,this lack of history can engender feelings of isolation and loss. As a new country we also have our own way of doing things. Our housing is lightly constructed and employs different materials and styles. Two-storey houses, double glazing and central heating are uncommon and construction is generally of wood or manufactured materials. Our roads are usually limited to two lanes and in the country often have a gravel or metalled surface. We are also a do- it-yourself culture. If you want things done about the house, you must generally do them yourself. Home decorating and renovation is a national obsession and you?ll need to take a hands-on approach to most things. Domestic servants are not available and status counts for little. As a New Zealander you will be expected not to stand on your dignity and ?muck in? like a good Kiwi, whatever the occasion.

Selchie, the capital gains doesnt exist at all. The only time you pay tax on a capital gain, is if you are a business and you make a profit - this is counted as regular business income tax. If you personally bought a house and then sold it 6 months later and made $100,000, then thats yours to keep.

[MotherBear]

That NZIS statement doesn't pull any punches, does it? More or less tells it as it is for once. Sort of 'take it or leave it', which is better than covering everything up with a layer of fairy dust. Not a pair of rose-tinteds in sight.

[ExPat]

Originally Posted by selchie

Ex-Pat, I disagree with your comparison of a "primitive" vs "sophisticated" understanding of money, though mostly because it is simplistic. It is also condescending to those who simply cannot afford to put away a part of that $100 in your example. They may understand quite well that investing could make their money grow in the long run, but they have immediate bills to pay. Others might see extra money - or time - as an opportunity to share with others. As long as they're not standing with a hand out at your door, why should you care how they spend their resources?

Dawn, thanks for the shot of Jonie Mitchell.

Not trying to be condescending, I was explaining *my* world view on the global monetary system. I tried to keep it brief and simplistic but as for your point about people standing at my door with their hand out is *exactly* what I'm talking about. People aren't doing it themselves, they're doing it by proxy through government taxation.

If NZ has a predominant culture of "do it yourself" then WHY OH WHY is the taxation so high? 12.5% GST AND "rates" AND 40% income tax on anything above 60k is excessive for a culture that prides itself on self reliance don't you think?

And let me clarify, my wife and I LOVED New Zealand and we'd LOVE to move there. I spent a great deal of money touring the entire country to be sure that it was what we wanted and the main thing that kept us from moving there was the high cost of housing and taxation.

With sufficient money, neither of those issues will be a problem. Just biding our time...

[duane1x]

Originally Posted by ExPat

If NZ has a predominant culture of "do it yourself" then WHY OH WHY is the taxation so high? 12.5% GST AND "rates" AND 40% income tax on anything above 60k is excessive for a culture that prides itself on self reliance don't you think?

...

I'm with Selchie. When I try to consider all the many subtle forms of taxation here in the US I believe it could well be equal. I do own a house here and property tax is about 6% of my AGI. Gotta consider that. In Texas sales tax is 8.25%. Not THAT much different from 12.5%. If I spend 25K on goods and services that amounts to a thousand bucks difference.

Look at the NZ ir3g - it's so straighforward as to be refreshing, after the byzantine US tax code. http://www.ird.govt.nz/resources/fil.../ir3g-2006.pdf

I don't know why "rates" have you in such an uproar, Expat. Methinks thou dost protest too much! Most in the US are used to paying property tax, and at a much higher % than the NZ rates. See this from Selwyn http://www.selwyn.govt.nz/rates/2006-revaluation.pdf
I'd love to pay those rates! And they showed a 66% increase in the recent 3 yr evaluation, and no raise in tax? Unheard of, where I come from.

Finally, I think you've got to consider the health insurance question. Expat pays $130/month for a family of four but one must understand that that is not an individual insurance policy. Someone somewhere is subsidizing this copayment -probably an employer or the state. If you went out to buy this individual policy on your own, you could easily pay $800/mo or more, as anyone shopping for insurance in the US will attest.

So to my eye you've got US Federal income taxes most likely in the 20%'s, add 6% property tax (in my case), add 8.25% sales tax, and add anywhere from 0 (full company paid - rare) to10% (full private individual pay) for health insurance. Obviously the more you make the higher the income tax percentages get, in both US and NZ, but making a lot of money is a good problem to have, no?

The year I paid Uncle Sam the most money? Boy was that a great year. I'd like to have that year again! Please! Where can I pay?

And that's enough about taxes for today--

[KiwiHopeful]

The real question is, why are our taxes so low?

U.S. NATIONAL DEBT CLOCK

The Outstanding Public Debt as of 06 May 2007 at 12:47:19 AM GMT is:

The estimated population of the United States is 301,800,910
so each citizen's share of this debt is $29,215.54.

The National Debt has continued to increase an average of
$1.42 billion per day since September 29, 2006!

But don't worry, ExPat, I'm sure that when your money's safely offshore, someone else will pick up your share.

[Dawn]

Wow, this has gotten so complicated!! At risk of being seen as simple and unsophisticated again I have to say it's this basic to us, 'Can we earn enough to own a house, pay the bills and enjoy a glass of wine every now and then?'. If the answer is yes, then we're cool. What tax we'll pay and what the country does with it is something we will better understand when we get there. Figures and percentages are just numbers for now because we can't replace them with actuals until we know them and we won't know them until we get there. Sure we can make estimates based on enquiries we make but estimations are all they are. When we're there we'll gain a much better understanding of whether these taxes are worth it or not until then we reserve judgement.

Here in the UK, we are taxed highly, there is a tax on everything and I reiterate that in fact money, finance, income, investment do not figure in our reasons for wanting to leave. Our country seems to have lost it's way The general feeling amongst people is one of despondency, we seem to have become a nation of frowners.

Again, at risk of being firmly placed in my 'hippie' box, I liken it to a life-force issue. You know there are (very generally) two kinds of people you meet, those that make you feel good, they brighten you up, make you feel rejuvenated, lift your spirits, make you smile just to think of them, you know the kind, they're good to be around, they share their energy, their life-force, you bounce off one another and the give and take is in equal measure, you both get a boost. Then there are those that do just the opposite, as soon as you see them coming you start to sag, before you even speak to them your energy or life-force starts to wilt, you know they're going to take, take, take (from your life-force I mean), by the time you finish talking to them you feel tired, fed up, you're probably gonna walk with a bit less of a spring in your step whilst they probably have a bit more of one in theirs. They have a negative influence on your energy usually because they syphon it off to add to their own.

The UK seems to be full of these people, everyone appears so bogged down with their anxiety, worry, anguish and craving, they are very wary of people that seem to have gained some liberty from it. Their approach, more often than not, begins from a negative stance rather than a positive, they are always looking for reasons why things can't, won't or shouldn't happen rather than looking for a way to make things work. It's odd because we have a history as a nation of entrepreneurs, of eccentrics and free thinkers but from the inside these things are discouraged. We seem to be suspicious of anyone that is different, it's as if anyone who thinks differently to the norm isn't to be tolerated. I feel that many institutions and authorities are very inward looking, afraid of change, crazy in a world that is in a major flux of change just now.

We are looking for more positivity, more enthusiasm, more drive, more motivation, more energy, more creativity, more freedom, more inspiration, more space, more tolerance, more smiles, more encouragement, more support, more understanding............you get it I know.

Not more money.

[ExPat]

We are looking for more positivity, more enthusiasm, more drive, more motivation, more energy, more creativity, more freedom, more inspiration, more space, more tolerance, more smiles, more encouragement, more support, more understanding............you get it I know.

I just noticed that some of my posts have been deleted but I had a long post and a great subsequent discussion about the general feelings from the NZ people we interviewed last year on our trip out to North Island and South Island.

I was going to refer you to it with regards to your expectations in NZ but I'll summarize it very briefly.

The people we interviewed in NZ were fairly eager to get out and move to Australia or somewhere else. I think during our visit elections were running because billboards all over NZ were highlighting the fact that 300 Kiwis were leaving NZ each week over to Australia or elsewhere. Many of the people we interviewed had the exact opposite emotions you just highlighted.

Enthusiasm? People were enthusiastic about leaving.
Tolerance? People had animosity against Asians for various reasons.
Freedom? Heavy taxation was a common complaint and an inability to escape NZ was another.

If you haven't already done so, I highly suggest you spend 3 to 6 weeks on vacation in NZ and truly get to know people. I interviewed anyone that would let me ask them questions. The car rental girl who drove us from the airport to the rental agency, the gondola boat guy who paddles us up and down the river in Christchurch, the politicians and workers we met in Wellington. The resort people we met in Taupo, and the waiter at the Sky Tower restaurant in Auckland. Everywhere we went we TALKED to people.

Unfortunately, this forum is filled with people that want to move TO NZ and not FROM NZ. Perhaps there should be a MoveFromNZ.org to counterbalance the issue.

I said it before and I'll say it again: We loved NZ and we would like to move there. Clearly, the goal of moving there isn't to make more money; I can do that 100 times better here in the US. The goal for *me* is to KEEP the money I have once I get there which is why I'm put off with the high taxation. I'm not adverse to paying my share for public services, I just don't want to pay my share and 3 other people's share too.

To borrow a phrase from a network I dislike greatly, we need more "FAIR & BALANCED" reporting on this forum.