New Zealand tax residency for individuals

When an individual becomes or stops being a New Zealand tax resident, the new non-resident visitor rule, and the transitional resident exemption for new arrivals. Figures are for tax year 2026. In New Zealand that is the income year from 1 April 2026 to 31 March 2027, which Inland Revenue calls the 2027 income year. The residency rules are day and year counts, not amounts. They come from IRD's residency page and the IR295 guide of April 2026. A resident is taxed on worldwide income; residency is separate from immigration status.

Quick reference

Item	Value
Becoming resident	The FIRST of: more than 183 days present in any 12-month period, or a permanent place of abode in New Zealand
Non-resident visitor (arrived on or after 1 April 2026)	Up to 275 days in any 18-month period, with conditions: not caught by the 183-day rule
Ceasing to be resident	BOTH: no permanent place of abode, and away more than 325 days in any 12-month period
Transitional residency	Most foreign-source income exempt until 4 years after the end of the month you qualify; employment and personal services income earned overseas is not exempt
Legislation	Income Tax Act 2007, sections YD 1 to YD 3 (section numbers not checked for this Guide)
Tax authority	Inland Revenue: https://www.ird.govt.nz/international-tax/individuals/tax-residency-status-for-individuals

Test 1: 183-Day Rule

• 183-day rule. You become a tax resident if you have been in New Zealand for more than 183 days in any 12-month period, unless you are a non-resident visitor. Residency is backdated to the first of the 183 days. See https://www.ird.govt.nz/international-tax/individuals/tax-residency-status-for-individuals
• Counting days. Parts of days, including the days you arrive and leave, count as whole days. The days do not need to be consecutive.
• Once resident, you stay resident until you meet the test for ceasing below. IR295: "If you've ever been resident in New Zealand under the 183-day rule you remain resident until you become a non-resident."
• Seasonal and fishing crew workers on a Recognised Seasonal Employer Limited Visa or a Fishing Crew Work Visa do not become resident after 183 days, as long as they do not establish a permanent place of abode.

Non-resident visitors (new from 1 April 2026). A visitor who arrived on or after 1 April 2026 is not subject to the 183-day rule while present 275 days or fewer in any 18-month period and ALL of these apply: not a tax resident or transitional resident immediately before arriving; not working for, or paid by, a New Zealand resident or a New Zealand branch of a non-resident employer; not selling goods or services to people or businesses in New Zealand, including on behalf of someone overseas; not required to be in New Zealand for work; neither the visitor nor their partner receives Working for Families; lawfully present; and required to pay tax in the country where they are resident. See https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir200---ir299/ir295/ir295.pdf

• A visitor who stays more than 275 days and is still lawfully present becomes resident from day 276.
• A visitor who stops meeting the conditions earlier becomes resident from the earlier of meeting the 183-day rule (visitor days count) or having a permanent place of abode.
• If no longer lawfully present, all days count toward the 183-day rule, backdated to the first of the 183 days.
• IRD's residency web page describes the non-resident visitor rule without a start date. The arrival date of 1 April 2026 comes only from the IR295 guide (April 2026). This Guide does not cover visitors who arrived before that date: refer them.

Test 2: Permanent Place of Abode

• Permanent place of abode rule. A permanent place of abode makes you resident whatever your day count, and it stops you ceasing to be resident however long you are away. You have one "if you have a place where you usually live in New Zealand". See https://www.ird.govt.nz/international-tax/individuals/tax-residency-status-for-individuals
• What counts. Somewhere, such as a house, where you normally live even if you are not there all the time. You do not need to own it, and it does not need to be vacant while you are away: a house you own and rent out while abroad can still be one.
• Ties IRD looks at. How often you return and how long you stay; family and social connections; economic interests such as investments or superannuation funds in New Zealand; employment or business connections; and whether you intend to return to live.

A person can have a permanent place of abode even while living abroad for long periods. IRD's detailed view is interpretation statement IS 25/16 on its Tax Technical site.

Transitional Residency (4-year exemption)

• Who qualifies. A new migrant or a New Zealander returning home who qualified as a tax resident on or after 1 April 2006 and was not a tax resident at any time in the 10 years before qualifying. It applies automatically and only once. See https://www.ird.govt.nz/roles/nz-tax-residents/exemption
• What is exempt. Most types of foreign-source income, including overseas interest, dividends, foreign investment fund income and rent. Lump sums from foreign superannuation have their own 4-year rule with the same period calculation.
• What is not exempt. Income earned overseas from employment or providing personal services. A double tax agreement may give full or partial relief.
• Start and end. It starts on the first day you are resident (backdated, for the 183-day rule, to the first of the 183 days). It ends 4 years after the end of the month in which you qualified, either by passing 183 days (not backdated for this purpose) or by establishing a permanent place of abode, whichever is earlier. IRD's example: arrived 10 March 2023, moved into a bought home 22 April 2023, exemption ends 30 April 2027.
• Ending it early. It ends if you or a transitional-resident partner apply for Working for Families (including Best Start); if you include exempt income in your IR3; if you confirm to a foreign jurisdiction and IRD that you pay New Zealand tax on overseas income from a date in the period; or if you tell IRD you no longer want it. The choice to opt out cannot be revoked, although IRD says that in limited situations it may consider a request to amend the return that ended the exemption.
• Afterwards. From the day after it ends you are taxed on worldwide income.

Personal income tax rates (resident individuals)

A resident's taxable income, worldwide once any transitional exemption ends, is taxed at these rates.

What	Value	Note
Source	all figures below	https://www.ird.govt.nz/income-tax/income-tax-for-individuals/tax-codes-and-tax-rates-for-individuals/tax-rates-for-individuals
Rate up to NZD 15,600	10.5%	Table "From 1 April 2025"; no later table is published
Rate from NZD 15,601 to NZD 53,500	17.5%
Rate from NZD 53,501 to NZD 78,100	30%
Rate from NZD 78,101 to NZD 180,000	33%
Rate from NZD 180,001	39%	Top rate

Ceasing New Zealand tax residency

• Ceasing residency conditions. You become a non-resident when BOTH apply: you do not have a permanent place of abode in New Zealand, and you are away for more than 325 days in any 12-month period. Non-residency is backdated to the first of the 325 days. See https://www.ird.govt.nz/international-tax/individuals/tax-residency-status-for-individuals
• Counting days. Parts of days you are in New Zealand, such as the day you leave, do not count toward the 325 days. The days do not need to be consecutive.
• Government workers sent overseas by the New Zealand government stay resident however long they are away. Their spouse, partner and children work out their own status.

Both conditions must be met together. Keeping a home in New Zealand, even one rented out, can stop you ceasing to be resident.

Tell IRD about a change of residency status; a transitional resident must tell IRD on becoming non-resident. If unsure, complete the tax residence questionnaire IR886. A certificate of residency can be requested in myIR.

The method, step by step

1. Decide whether the person has a permanent place of abode in New Zealand, using the ties on the residency page: https://www.ird.govt.nz/international-tax/individuals/tax-residency-status-for-individuals
2. For an arrival on or after 1 April 2026, check every non-resident visitor condition in IR295: https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir200---ir299/ir295/ir295.pdf
3. Count days present in any 12-month period (parts of days count). Residency starts on the earlier of the first of the 183 days and the permanent place of abode date: https://www.ird.govt.nz/international-tax/individuals/tax-residency-status-for-individuals
4. For a new resident, check the 10-year look-back and work out the transitional exemption end date: https://www.ird.govt.nz/roles/nz-tax-residents/exemption
5. For a person leaving, confirm there is no permanent place of abode, then count days absent (parts of days in New Zealand do not count): https://www.ird.govt.nz/international-tax/individuals/tax-residency-status-for-individuals

Ask the client first

• On what dates were you in New Zealand over the last 18 months, and when did you first arrive?
• Do you have a place in New Zealand where you usually live, owned or rented, and is it kept for you while away?
• Were you a New Zealand tax resident at any time in the last 10 years?
• Do you work for a New Zealand employer, sell to New Zealand customers, or receive Working for Families?
• Where are you tax resident abroad, and do you pay tax there?
• What foreign income do you have: employment, business, investments, foreign superannuation?

When to refuse or refer

• Refer anyone who may be resident in New Zealand and another country at once: the double tax agreement tie-breaker decides, and IRD's IS 25/16 is the detailed view.
• Refer part-year cases (arriving or leaving during the income year) where the backdated start or end date changes what income is taxed.
• Refer transitional residents with foreign superannuation, foreign trusts, or employment income earned partly overseas.
• Refer a person who has already opted out, or filed a return that may have ended the exemption.
• Refuse to state that someone is non-resident only because they left New Zealand: the permanent place of abode test comes first.

Sources

• https://www.ird.govt.nz/international-tax/individuals/tax-residency-status-for-individuals
• https://www.ird.govt.nz/-/media/project/ir/home/documents/forms-and-guides/ir200---ir299/ir295/ir295.pdf
• https://www.ird.govt.nz/roles/nz-tax-residents/exemption

Working paper only. The permanent place of abode test can catch individuals who believe they have left New Zealand but keep property there. Have a qualified New Zealand chartered accountant review this Guide before departing.

Contributed by OpenAccountants.