Reference

NZ FIF Rules and Foreign Investment Thresholds 2026

Last updated: May 2026

$50,000

De Minimis Threshold (cost)

Fair Dividend Rate

1 Apr

FDR Valuation Date

The Foreign Investment Fund (FIF) rules tax New Zealand tax residents on certain offshore investments, such as overseas shares and funds, even where no dividend is paid. They are widely misunderstood, so this is a plain-English reference to the threshold, the methods and the key rates. It is general information, not tax advice.

FIF Guide FDR Method Calculator CV Method Calculator

The De Minimis Threshold

Item	Detail
Threshold	$50,000 NZD total cost of all attributing foreign investments
Based on	Original cost in NZD (including brokerage), not current market value
Who it applies to	Individuals and certain trusts
If under the threshold	FIF rules do not apply; you are taxed on actual dividends only
Proposed change	Government has proposed increasing the threshold to $100,000 from 1 April 2026 to restore its real value since 2000; confirm the current threshold with IRD

Source: IRD - Foreign investment funds (FIFs). A proposed increase of the de minimis threshold to $100,000 has been consulted on; check IRD for the rule in force for your tax year.

FIF Calculation Methods

Method	How it works
Fair Dividend Rate (FDR)	Deemed income of 5% of the opening market value on 1 April. The most commonly used method.
Comparative Value (CV)	Taxes the actual change in value plus distributions over the year. Individuals can pick the lower of FDR and CV each year.
Cost method	Used where a market value is not readily available; income based on a deemed return on cost.
Deemed Rate of Return (DRR)	Applies a set rate to the opening cost; used in limited cases.
Attributable FIF income method	For larger or controlling interests; looks through to the FIF's own income.

Most individual investors with overseas shares or ETFs use FDR, paying tax on a deemed 5% of the start-of-year value at their own income tax rate. In a year where your investments fell or returned less than 5%, the comparative value method may give a lower result, and individuals can choose the lower of the two.

Source: IRD - Calculate my FIF income. Australian shares and some other holdings can be exempt; see IRD for exemptions.

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