Quote Originally Posted by fungus pudding View Post
What is the 'clear advantage'?
In NZ, tax free capital gain on the sale of residential houses. There are so many ways one could game the system; via being a slumlord or doing fixer uppers, holding the properties in multiple names within the family. The gaming of being tax free is so significant that IRD does not have the tools to monitor it. VERY different to in Canada where lawyers and real estate agents are held accountable by the tax dept for not crossing the Ts and dotting the Is. In NZ if a real estate agent is caught not confirming with AML, well they just lose their job. In Canada, up to 1/3rd (IRC) of the value of the house must be held in a retainer and is not released until the CRA gives the OK.

So when you compare to Kiwi Saver, an investment scheme where you can't leverage and the gains are taxed annualy, it doesn't take long to realise that "cumulative" gains are not really there despite employer matching contributions. FYI, this was all addressed in Canada when they introduced RRSPs. Small matching % of contributions are ineffective as many managed funds take more than 2 or 3% in admin / mgt frees (especially during the 80s and 90s era). So they made a maximum of 18% limit for matching contributions. In additions, UNUSED contributions in previous years could be carried forward indefinitely. Meaning on years where you contributed nothing to your pension, the CRA would allow that portion credit to applied in the next year (essentially doubling your contribution amount). This flexibility is critical as stock market rise and fall and so should the investor be able to choose WHEN they want to be in the market or not.