More Reasons to Move to New Zealand

Despite the fact that New Zealand remains one of the most appealing places to emigrate to, many would-be expats are putting their dreams of relocation on hold because they are facing such economic uncertainty in their own lives.  To sell up everything and move to the other side of the world and start again is nothing if not daunting…and to do so against a backdrop of a world teetering on the brink of recession is downright scary!

However, there are actually economic reasons why you should perhaps take your dreams of a new life in New Zealand off the back burner – including the fact that income tax rates have been cut, the terms of the investor visas have been vastly improved, and because the nation is one of the OECD countries with the lowest tax burden on labour income and the only OECD country that does not levy compulsory social security contributions.  If you need more reasons to convince you to move to New Zealand, read on…

The top rate of income tax in New Zealand was slashed by 5% last year and now stands at just 33% for high earners – this in turn has resulted in the Organisation for Economic Co-operation and Development reporting that the average tax wedge (which is income taxes plus employee and employer social security contributions, minus cash transfers as a percentage of total labour costs) is considerably below the OECD average for all households in New Zealand.

The bottom line being that as a general rule of thumb you can expect to have far more disposable income in New Zealand as a result.  This will be music to the ears of anyone living in the UK right now who is being taxed heavily, stealth taxed aggressively and dealing with rising costs of fuel, utility bills and perhaps even mortgages by the end of the year, (if the much anticipated interest rate rise happens).

New Zealand has cut its income tax rates in a bid to boost the economy.  It has also taken the bold and direct action of vastly improving its investor visa offerings too.  It makes sense to make it more appealing for investors to commit to the nation, after all they bring in a cash injection and generally end up contributing positively to the nation on a number of levels for the medium to long-term.

The latest changes see a reduction in the amount of time investors are required to spend in New Zealand each year – they now only need to spend 44 days per annum in the country to qualify.  What’s more, there has been a broadening of the range of investments that qualify for a visa.  Bank bonds, equities are residential property are all now acceptable vehicles for qualifying investment for example.

Investors also now qualify for immigration if they employ at least five people or they record at least NZ$1 million in annual turnover.  Previously it was the case that applicants needed to meet both requirements.  To be a qualifying investor you can either apply for the straight investor visa and commit NZ$1.5m for at least 4 years – or you can apply for the investor plus visa and commit at least NZ$10m for a minimum of 3 years.

The very latest Immigration Department’s ‘Migration Trends Key Indicators Report’ reveals that there has been a decline in the number of residence approvals to date this year – it stood at 28,675 upon publication of the report recently and compares unfavourably with 32,359 for the same period last year and 33,526 for the same period in 2009. 

The report comments that: “Skilled people who might be interested in migrating are less willing and able to give up a job, sell their house and move to a new life overseas.  Additionally, fewer skilled job offers were available in New Zealand during the period.  Opportunities are expected to increase once the economy recovers and the rebuild of Christchurch gains momentum.”

These comments are key – it’s true that it will take a great deal for anyone to give up the life that they currently have and risk a relocation in this economic climate – but with New Zealand’s immigration department and exchequer going out of their way to improve the situation for would be, financially strong and responsible immigrants, at least a would-be expat can be clear that they are much wanted in New Zealand.

It is of vital importance to any expat that they do their fiscal homework however, and you may need to look beyond the lower taxes, improved visa offerings and positive attitude in New Zealand towards migrants, and ensure that you will be able to find and secure well-paying work for at least the medium-term.  You would therefore be very wise to ensure you have an offer of employment to support a visa application before you attempt to begin relocation, and you should look closely at housing costs and the cost of living related to the wages you will likely be earning in a bid to offset the risks that remain surrounding a relocation.

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