Quote Originally Posted by SBQ View Post
From the individual IRD tax resident's point of view, correct. But from the whole picture point of view, the PIEs and various NZ operated fund managers, Kiwi Savers, etc. pay the tax on their gains and incomes annually. These actively managed funds are essentially 'traders' and by definition, all their short term gains made are taxable. .
No, this is simply not correct. In a PIE fund, any capital gains made in shares in New Zealand resident companies and Australian resident companies that are listed on an approved Australian Stock Exchange index and maintain a franking credit account, are not taxable.

For investments in offshore equities PIE funds apply the “fair dividend rate” (FDR) method to calculate the amount ofany taxable income. Under the FDR method, the funds will generally have taxable income ineach income year (1 April to 31 March) in relation to the applicable equities calculated byreference to 5% of the average daily opening market value of the applicable equities. Dividendsor sales proceeds received by the funds in relation to the applicable equities should not besubject to further tax. The funds may be entitled to a credit for any foreign withholding tax paidon dividends received from the applicable equities subject to certain limits. No tax deductionmay be claimed for any losses in respect of the applicable equities under the FDR method. If you're a 28% taxpayer therefore, you'll pay 1.4% p.a. in tax, regardless of whether the fund makes -5% or +20%, so it's hard to call it a capital gains tax.

The only index-tracking NZ equity share fund with a 10 year record has returned 13.7% p.a. net of fees/pre tax over the last 10 years to 31/07/19. I don't have the numbers for Auckland real estate (they are amazingly hard to get hold of on Google) but I would be surprised if net of tax on income, maintenance, repairs, insurance, rates etc. they are close to comparable.