Taking care of money matters is an important task to be done when moving to New Zealand. It is crucial that you understand such things to ensure that you won’t encounter major problems along the way. To make your relocation a tad easier, here are some of the things you need to know about money and taxes in New Zealand.
Cost of living
The cost of living in New Zealand varies from one city to another. To give you an idea, an independent international survey ranked Auckland 58th and Wellington 75th in the world in terms of cost of living. Hong Kong, Singapore, New York, and London are ranked 3rd, 4th, 16th and 25th, respectively. This basically means that New Zealand’s major metropolitan areas are more affordable than those in other countries.
Everyone who works and lives in New Zealand must pay taxes. Taxes are an inescapable part of life, after all. But as compared to other countries, the tax system in NZ is much easier to navigate. It is also relatively much friendlier with your earnings and assets. As a matter of fact, New Zealand’s tax system is considered the most attractive amongst 27 OECD countries. Here are some of the key features of the country’s tax system.
• No inheritance tax
• No general capital gains tax, although it can apply to some specific investments.
• No local or state taxes apart from property rates levied by local councils and authorities
• No payroll tax
• No social security tax
• No health care tax, apart from a very low levy for New Zealand’s ‘accident compensation injury insurance scheme
As soon as you arrive in New Zealand, you should apply for an IRD number so you can pay your taxes properly. This way, you’ll be taxed at the right rate right from when you start working. To get an IRD number, you must fill out an application form called IR595, which you can download from the Inland Revenue website. Then, take the form and other supporting documents to a New Zealand Postshop or an AA Driver Licensing agent.
For maximum convenience, you should consider opening up a New Zealand bank account from your home country before you leave. This way, you can transfer money into your new account and start using your funds upon your relocation. It will also be quite useful if you were to bring evidence of your credit history with you to New Zealand so you can apply for a credit card or borrow money.