Part 4
Taxes, everybody’s favorite topic
New Zealand has a top tax rate of 33%. Okay, you think that’s not bad, the U.S. is right up there also. Well the trouble is you get to the 33% much faster as there are only three tax brackets. Making over $65,000 NZ Dollars per year will get you into the top bracket. That’s around $50,000 US Dollars. There are no deductions for a private person and you don’t get credit for kids or being married. The way around this seems to involve having a business and taking deductions through the business. You will most likely need the services of an accountant to keep in line with the tax laws.
On the consumer spending side of things, the 15% Goods and Services Tax (GST) is built into the purchase of any items in the store. What you see on the price tag is what you actually pay at the checkout.
If you have U.S. income and you earn income in New Zealand it then becomes even more complicated. You will need to file taxes in both countries and so far I find that I come out on the short end of the stick. It is far less complicated to only work in New Zealand and have no income from the United States.
Utility Costs
Electric rates are quite high here. Most of the electricity is from hydro power and also quite a bit from wind generation. There are some areas in the country with piped gas. You also can use bottled gas if you choose but it ends up costing more than electricity. Most New Zealand people have one or two warm rooms and the remaining portions of the house have minimal heat. Many of the older homes lack insulation but the government is trying to remedy that with programs to help with the cost of insulating older homes. Newer built homes do not have this problem but they also take a different approach on home heating.
Continue reading“New Zealand: Thoughts After Seven Years, Part 4, by Nivek”