Tax Settings Risk Undermining New Zealand's Golden Visa Success
A new review by law firm MinterEllisonRuddWatts finds the Active Investor Plus visa is genuinely attractive — but that New Zealand's tax settings are the single biggest disincentive, keeping many investors' relationship with the country “temporary and transactional.”
The short version
- In its first 13 months, the relaunched Active Investor Plus (AIP) visa attracted NZ$1.72 billion in investment, with Americans the largest group of applicants.
- The review found the April 2025 relaunch was a “material improvement,” but that tax rules are the greatest remaining source of friction.
- Two rules stand out: the Foreign Investment Fund (FIF) regime and the “permanent place of abode” (PPOA) tax residency test.
- The report also warns of liquidity risk in 2028–2029, when the first big cohort of growth-visa holders may seek to exit private credit funds.
A strong start — with tripwires
The Government relaunched its golden visa scheme — formally the Active Investor Plus visa — in April 2025, simplifying requirements and broadening the scope for qualifying investments. By the review's count, those changes worked: the programme drew NZ$1.72 billion across its first 13 months, and the largest single group of investors came from the United States.
The MinterEllisonRuddWatts report — based on interviews with 16 visa investors plus immigration, tax and investment advisers — is clear about why New Zealand appeals. It is stable and safe, institutional trust is high, and quality of life is strong. As one investor memorably put it, the draw is “cleaner air and no missiles.”
But the report's central finding is a tension at the heart of the scheme: the very tax settings that govern a new resident's worldwide income may be discouraging exactly the deeper commitment the Government hopes to attract.
The mismatch between tax settings and the aim that visa holders connect deeply here is described as “one of the strongest tensions” underlying the Active Investor Plus visa.
— MinterEllisonRuddWatts golden visa review, July 2026
The two tax rules causing the most friction
1. Foreign Investment Fund (FIF) rules
Taxing residents' offshore holdings
FIF rules cover a New Zealand tax resident's offshore holdings — including foreign equities, venture capital investments and interests in private companies. Despite recent tweaks, the report says they remain problematic, with many visa holders fearing they will be double-taxed on worldwide holdings and income once they become New Zealand tax residents. Bilateral tax treaties only address some of these problems.
Americans are especially exposed, because US citizens are taxed on their global income even when living abroad permanently. Of particular concern are US venture capital investments that are frequently exempt from US federal tax under the Qualified Small Business Stock (QSBS) exemption. Once an American becomes a New Zealand tax resident, those often long-held assets can be taxed here under FIF rules after a transitional period ends.
“The value captured in these investments was created entirely within the US ecosystem… before most of us started even toying with the idea of time in New Zealand, taxing those gains feels like territorial overreach, a claim on returns New Zealand had no hand in generating.”
— Courtney Andelman, AIP visa holder
Returning New Zealanders who have built businesses and invested abroad face the same set of issues when they come home.
2. “Permanent place of abode” (PPOA)
An unclear tax-residency trigger
A non-resident can be deemed a New Zealand tax resident under one of two tests. The first is a simple count of days spent in the country over any 12-month period. The second — the permanent place of abode test — rests on Inland Revenue's view that a person's New Zealand home and connections amount to permanence. Crucially, it is not clearly defined.
That vagueness worries investors, who fear they could trigger full tax residency unwittingly — through the very acts the scheme encourages, such as buying a home and building strong community and business ties. In other words, the more genuinely someone puts down roots, the more tax exposure they risk.
A looming liquidity question: 2028–2029
AIP visas come in two categories. The balanced visa requires NZ$10 million invested over five years across a wide range of assets. The growth visa requires NZ$5 million over three years in riskier investments more closely tied to productivity and long-term economic growth.
More than two-thirds of AIP visas issued are growth visas — and those holders have overwhelmingly favoured a handful of private credit managed funds. The report warns this concentration could create redemption pressures in 2028 and 2029, when the first large cohort of growth-visa holders reaches the end of their three-year term and may seek to exit. The risk is sharpest if those investors are not deeply connected to New Zealand and prefer to withdraw their capital entirely.
Fund reputation
Concentrated exits could pressure individual private credit funds.
Programme & country risk
A messy exit wave could dent NZ's standing as an investment destination.
Fewer new applicants
Less new money flowing in would compound any redemption strain.
Fragmented oversight and fragile demand
Report co-author and tax partner Andrew Ryan argued the scheme is not well served by fragmented responsibility. Oversight is split across Immigration New Zealand (within MBIE), Invest NZ (an autonomous Crown entity under Trade and Investment Minister Todd McClay), and Inland Revenue, which owns the tax rules under Revenue Minister Simon Watts. Ryan suggested giving prospective visa holders greater clarity and upfront information on tax matters — including PPOA — would improve the programme, and that rule changes should be considered.
Revenue Minister Simon Watts has previously said IR is continuing to review both the FIF rules and the permanent place of abode residency trigger.
There is also a demand-side warning. Much of the programme's popularity is tied to global upheaval — war in Eastern Europe and the Middle East, and deep political division in the United States. If those push factors ease, or competing countries revive their own schemes, demand could soften quickly. The report notes that Canada, the UK and Australia have all cancelled their investor visa schemes in recent years — a reminder of how fast the landscape can shift.
What this means if you're considering the AIP visa
Get tax advice before you apply — not after
Understanding how FIF rules and the transitional resident exemption interact with your existing portfolio is essential, especially for US citizens holding QSBS-exempt assets.
Plan around the transitional residence window
New migrants typically get a temporary exemption on most foreign income. Knowing when that window closes lets you structure holdings ahead of time rather than being caught out.
Understand fund liquidity and lock-ups
If you invest via a growth-category private credit fund, ask about redemption terms and exit timing — particularly given the concentration the report flags for 2028–2029.
Weighing up the Active Investor Plus visa?
Check your likely eligibility in minutes, or model the full cost of an AIP investment — including the tax questions worth raising with your adviser.
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Source
Based on reporting by Kate MacNamara, “Tax settings risk undermining Government's golden visa success,” NZ Herald (8 July 2026), covering the MinterEllisonRuddWatts golden visa review co-authored by tax partner Andrew Ryan. Investment figures (NZ$1.72 billion over 13 months) and rule descriptions are as reported. This summary is independent editorial analysis by NZ Golden Visa and is not affiliated with the report's authors.