Technical article
When Do You Become a Tax Resident in Australia and New Zealand?
Each tax office has its own tests, and they are not the same.
Picture a couple named Marcus and Helen. Both are 64, from Texas. They plan to spend part of each year in New Zealand and part in Australia. They keep asking one thing. At what point does a tax office start to see them as living there?
Each tax office has its own tests, and they are not the same. I read both on 10 October 2026.
Australia: four tests
The Australian Taxation Office (ATO) names four tests: the resides test, the domicile test, the 183-day test and the Commonwealth superannuation test. (Each page: last updated 3 June 2026.)
| Test | What the ATO page says |
|---|---|
| Resides | "The primary test." The ATO weighs all the facts, including presence, intention, family and business ties, assets and social ties. "No single factor is likely to be decisive." (Paraphrase: six months counts as a considerable time, but length alone does not decide it.) |
| Domicile | Looks at whether you have a "permanent place of abode" overseas. (Paraphrase: if you do, this test is not met.) |
| 183-day | Paraphrase: in Australia for more than half the income year makes you generally a resident, unless your usual place of abode is outside Australia and you have no intention of living there. The income year is not the calendar year. |
| Commonwealth superannuation | Paraphrase: applies to contributing members of two closed public-sector schemes, and their spouse and young children. Not a test most retirees would meet. |
New Zealand: two tests
Inland Revenue says that "You have a permanent place of abode if you have a place where you usually live in New Zealand." It also says you become a tax resident if "you've been in New Zealand for more than 183 days in any 12-month period (unless you're a non-resident visitor)." To stop being a resident, you must have no permanent place of abode in New Zealand and be away for more than 325 days in any 12-month period. (Last updated 25 June 2026.)
The 4-year window in New Zealand
Inland Revenue's page on the temporary tax exemption says it "lasts for about 4 years after you become a New Zealand tax resident." Paraphrase of who qualifies: a new migrant or a returning New Zealander who became resident on or after 1 April 2006 and was not resident at any time in the 10 years before. It can be used once, and it applies automatically.
Most foreign-source income is exempt in that period, including overseas interest, dividends, foreign investment fund income and rent. Income from employment or personal services overseas is not. (Last updated 17 June 2026.)
What the page says about pensions is thin. It mentions that "Lump sum withdrawals of foreign superannuation funds have their own 4-year exemption rule." It does not clearly say that regular foreign pension payments are exempt, and it gives no rate for them.
The vacancy fee in Australia
If you buy a home in Australia as a foreign person and then leave it empty, the ATO may charge a yearly fee. The page says it applies when a home is "vacant for 183 days (6 months) or more in one vacancy year." A home counts as occupied if the owner, a relative or a tenant lives there for at least 183 days. Leases and rentals must be at least 30 days. Short stays under 30 days, including web-based stay sites, do not count.
The fee is tied to what you paid when you applied to buy. The page says, "For vacancy years that start from 9 April 2024, the vacancy fee will be double the foreign investment application fee." Its own example is a AUD 13,200 application fee leading to a AUD 26,400 vacancy fee. (The page example shows no currency code. I take it to be Australian dollars.) The return is due "within 30 days at the end of each vacancy year." (Last updated 17 March 2026.)
Note that foreign persons are currently barred from buying an established home in Australia, with exceptions. The vacancy fee mostly matters to those who hold a new home or one bought under an exemption.
What is left open
- The tax rate New Zealand applies to regular foreign pension payments after the 4 years end: not stated on the pages read.
- How either country treats a US pension or Social Security under the tax treaty: not checked.
- Whether your days in each country add up under both tests: that depends on your own facts.
You could…
- Keep a simple diary of days spent in each country.
- Ask an accountant who works with Americans abroad to confirm how the tests apply to your pension and savings.
- Check whether any home you plan to own would be occupied for at least 183 days a year.
If you had to pick one number to track, would it be your days, your ties, or your income?
Figures are estimates for planning, based on public data. Date read: 10 October 2026.
Sources
- Australian Taxation Office, "Australian resident for tax purposes" (ato.gov.au/individuals-and-families/coming-to-australia-or-going-overseas/your-tax-residency/australian-resident-for-tax-purposes) and "Residency tests" (ato.gov.au/api/public/content/0-fab3997d-bd33-42be-ba21-02de08eefaac); ATO, "Vacancy fee return for foreign owners" (ato.gov.au/individuals-and-families/investments-and-assets/foreign-resident-investments/foreign-investment-in-australia/vacancy-fee-return-for-foreign-owners); Inland Revenue New Zealand, "Tax residency status for individuals" (ird.govt.nz/international-tax/individuals/tax-residency-status-for-individuals) and "Temporary tax exemption" (ird.govt.nz/roles/nz-tax-residents/exemption).
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