A British physician who relocated to New Zealand to help address the country's healthcare shortage has discovered that landlords can deduct mortgage interest while doctors cannot claim $11,000+ in mandatory professional fees—a tax disparity that highlights why skilled migrants increasingly choose Australia instead.
The doctor, who moved from the UK over a year ago as a fully qualified specialist in high demand, must pay more than $11,000 in college fees, exams, course fees, and accommodation for mandatory professional development to get UK qualifications recognized by New Zealand royal colleges. None of it is tax-deductible.
Mate, this is the brain drain in microcosm. New Zealand desperately needs doctors, actively recruits them internationally, then structures tax policy to favor property speculation over professional development. And we wonder why they're all heading to Sydney.
"Is that genuinely true?" the doctor asked in frustration on social media. "I'd foolishly assumed that, because in the UK these things are tax-deductible, they would be here. But seemingly in NZ this doesn't apply, it's only for sole traders or businesses."
The tax code's logic is straightforward but produces perverse outcomes. Landlords operating rental properties are considered to be running a business, so mortgage interest and other expenses are deductible. Employed professionals, even those required to maintain expensive qualifications as a condition of employment, cannot deduct those costs.
In the UK, professional fees and mandatory continuing education costs are tax-deductible for employed professionals. The rationale is that these expenses are necessary for maintaining employment and benefit the economy through a more skilled workforce. New Zealand takes a different approach.
The doctor noted the broader irony: "If I bought property to exploit other people's need for a home, all expenses including interest are tax-deductible. But as a doctor, my $11k+ of professional fees just to prove I'm qualified aren't?"
