Wealth tax flight risk: Why New Zealand isn't Norway
November 2, 2026
Summarised by Centrist
New research from Norway suggests wealth taxes cause far less capital flight than critics claim. But New Zealand tax expert Terry Baucher warns that Australia's proximity and favourable tax arrangements could make the consequences very different here.
Writing for interest.co.nz, Baucher examined a new National Bureau of Economic Research paper analysing Norway's wealth tax reforms between 2021 and 2024.
The study found that at most 100 wealthy individuals left Norway because of the changes. Wealth tax revenues increased by an estimated 71.5%, compared with a projected 75% increase without migration.
Researchers also found no significant reduction in business investment or exodus of startup founders.
The findings challenge a central argument against wealth taxes, including those proposed by New Zealand's Greens and Te Pāti Māori.
However, Baucher cautioned that Norway's experience may not translate directly to New Zealand.
He believes New Zealand faces a particular vulnerability because of its close relationship with Australia, writing that "we probably carry a higher risk of capital flight than comparable jurisdictions in the Northern Hemisphere."
Australia offers eligible temporary residents exemptions from tax on foreign-sourced income and capital gains on non-Australian assets, potentially making relocation financially attractive to wealthy New Zealanders.
Baucher described the opportunity as "potentially quite an attractive offer".
He also acknowledged that the Norwegian findings suggest wealth taxes may not cause the widespread departures opponents often predict.
Nevertheless, he argued that the design of any New Zealand wealth tax would be critical, particularly how governments address capital flight and the practical difficulties of valuing assets.
The Norwegian research provides evidence that wealth taxes need not trigger a mass exodus. Whether New Zealand could achieve similar results, with Australia just across the Tasman, remains an open question.
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