The “Golden Visa” scheme, introduced in 2025, has been lauded by the current New Zealand government as a huge success.
In a press release today, law expert Alison Pavlovich PHD, who is also a candidate for the NZ Outdoors & Freedom Party (NZOFP) in this year’s election, said the essence of the scheme is that foreign investors commit a minimum investment of $5m into New Zealand-based direct investments and/or managed funds and after three years, they are entitled to apply for permanent residency (under the ‘growth’ category). There is an alternative scheme, (the ‘balanced’ category), that requires a $10m investment over five years and provides a broader range of investment options. Underpinning this scheme is the unsubstantiated theory that bringing more capital (money) into New Zealand will make us all better off – classic trickle-down economic theory.
“This is a relatively cheap level of investment to buy a residence visa“, says Pavlovich.
“A residence visa allows the investor, and their family, to enjoy the benefits of being a New Zealander including attending schools and universities, using healthcare facilities, and to buy property. While the golden visa will only include the ability to invest in one home costing at least $5m, when permanent residence is granted after three or five years, the investor will have the same property purchasing rights as all New Zealanders. The golden visa application can include dependent children up to 24-years old – perfect for those planning to attend school and university as domestic students.
“The crux of this commentary is about the tax implications of this visa. Visa recipients are likely to be paying a lot less tax in New Zealand than a domestic resident in the same position. There are three reasons for this.
“Tax residence
“First, the golden visa recipient may not be a tax resident of New Zealand. This means they will not pay tax on income earned outside New Zealand and they are likely to enjoy far lower tax rates on income earned inside New Zealand. This is a complex area but to put it simply, someone becomes a tax resident in New Zealand either because they have a home available to them, or because they are present in New Zealand for at least six months in any 12 month period.
“Presence
“The golden visa does not require the investor to be present in New Zealand for long periods of time so the presence test for tax residence does not need to be met. In fact, Erica Stanford, Minister of Immigration, points out in her press conference, that she speaks to investors to understand their needs and one of their needs is not to be present. During the period of investment, prior to applying for permanent residence, the investor in the growth category is only required to be in New Zealand for 21 days over the three-year period – an average of one week per year. Under the balanced category of the visa, an investor is required to spend 105 days in New Zealand over a five-year period. However, such is the desire not to be present in New Zealand by some investors, the period of required presence will reduce with every additional $1m of investment! Once permanent residence is granted, there are no presence requirements.
“New Zealand based home
“An investor may also become a tax resident where they have a home available to them in New Zealand, even if they do not meet the presence test. However, where the investor has a home in another country as well, and New Zealand has a double tax agreement with that other country, it is quite possible the investor will not be treated as a tax resident of New Zealand.
“Tax holiday
“Second, even if a golden visa recipient moves permanently to New Zealand, they will enjoy a four-year tax holiday on their income earned outside New Zealand, unless it is derived from personal services. This means a wealthy individual who moves to New Zealand will not pay tax in New Zealand on their investment income from overseas for a full four years after their arrival.
“Reduced taxes on foreign investment income
“Third, after the four-year tax holiday period lapses, the government are changing the rules to provide further tax relief on foreign investment income for these individuals and other wealthy migrants and returning kiwis. Stanford says that more tax changes are in the pipeline to further benefit these investors. As Stanford says “we don’t want them to be forced to stay offshore because they can’t afford to be in New Zealand because of tax reasons”.
“While the government pats themselves on the back for the uptake of golden visas, it is important for us to recognise and understand what we have given away. For as little as $5m investment into the sharemarket or a managed fund, New Zealand has provided access to our public infrastructure and services while also providing far more advantageous tax settings than domestic residents enjoy. I would personally like to see an end to these visas. I don’t think a pay for visa scheme is desirable, ethical, or what New Zealanders want.”
The next question is, who are the entities that hold New Zealand-based direct investments and/or managed funds?
And who’s getting ‘donations’ for such deals?
Remember when Luxon promised to get instititional.investors building infrastructure in NZ?
No institutional investor would invest money in a corrupt, tax money laundering government.
Wondering why you cant afford a house, bach, and family like your grand parents did?
Political corruption is the leading cause of poor performing economies.
So while Luxon, Seymour, Peters, Willis, Van Velden, Watts, and Simpson line their pockets! with your laundered taxes; more kiwi kids live in households below the bread line.
So academics, wanna be mps, honest wealthy people, and kiwi voters.
NZ needa a new credible centre right government to expose and purge the political charlatans and fraudsters then steer the good ship nz on a course which is properous for all citizens.
Just like the good old days.
This is so corrupt it’s not funny
What’s the issue here. They don’t pay taxes on income outside NZ. So what. They are limited to less than 6 month stay per year. Need to remember they add to the economy by hiring locals. They pay GST and other related taxes and often spend far more in the short time they stay in NZ than most citizens in an entire year. We need to attract these types of people. Not many kiwis are buying 10M dollar homes so can’t use the housing shortage as an excuse besides how many of the 10M investors do you think there will be?
The issue here is establishing a legal precedent that NZ citizenship can be “bought” for the right price (ie politicians get richer through fraud, graft and embezzlement).
And how long before the price to citizenship gets “lowered” one day while we’re not looking?
I don’t want NZ becoming the next UK
Maybe an analysis is in order how these mega rich have profited in the financial exploytation of the People of New Zealand in the first place.
Sounds like a globalist plan to take over this country when Europe becomes an Islamic state. NZ residents will become second class citizens in their own country. Kiwis currently pay tax on every cent they receive. Now they will be subsidizing non residents. What is wrong with investment savvy Kiwis earning major export dollars for Gods own? China after the Sino Japanese conflict grew from a copycat manufacturer to the leading industrial nation on the planet. NZ can do it too with sound governance.