How will the re-investment work?

[JimNasium]

I’ve seen on information about the new NISA that you will be able to re-invest after you have sold a part of your investments in NISA. Does anyone know how this will work? Or has it not been announced yet.

[sutebayashi]

The allocation that you sold should become available again from the beginning of the next year, roughly. There are possibly some edge cases to think about.

In the basic case, say if you buy 1,000,000 yen’s worth in your nisa during 2024, max your nisa out, but then sell what you bought for that 1,000,000 (no matter what it be worth now) before the end of 2029, from 2030 you should be able to buy 1,000,000 more again.

Your question made me wonder though, say if you bought and sold in 2024, shorter term trading. I am not sure whether you’d be able to invest that 1,000,000 again in 2025, on top of the amount you would be able to invest in 2025 even if you had not sold. I am guessing the answer is most probably no, it’s probably an annual limit, whether you are reusing it or investing it for the first time. Since they are not trying to give short term traders a tax break.

[TokyoBoglehead]

The allocation that you sold should become available again from the beginning of the next year, roughly. There are possibly some edge cases to think about.

In the basic case, say if you buy 1,000,000 yen’s worth in your nisa during 2024, max your nisa out, but then sell what you bought for that 1,000,000 (no matter what it be worth now) before the end of 2029, from 2030 you should be able to buy 1,000,000 more again.

Your question made me wonder though, say if you bought and sold in 2024, shorter term trading. I am not sure whether you’d be able to invest that 1,000,000 again in 2025, on top of the amount you would be able to invest in 2025 even if you had not sold. I am guessing the answer is most probably no, it’s probably an annual limit, whether you are reusing it or investing it for the first time. Since they are not trying to give short term traders a tax break.

Are you sure this is correct? The yearly contribution limit is 3,600,000 and the lifetime is 18,000,000.

I thought the yearly contribution limit was firm in all cases, but I would love to be wrong.

[sutebayashi]

Not sure which part you are asking am I sure about, but the re-invest part I am. Did some review now, and this:

https://diamond.jp/zai/articles/-/10156 ... ,上限が1800万円）%E3%80%82

③売却すれば、保有枠は再利用できる

　新しいNISAでは、非課税保有枠は再利用できます。非課税保有限度額は1800万円までと設定されてはいますが、売却してしまえば枠は復活し、投資そのものは1800万円以上できることになります（非課税で保有して運用し続けることができる上限が1800万円）。ただし、売却した分の投資枠が復活するのは売却した翌年なので、デイトレードなどの短期売買を日々繰り返すことはできません。

I think you are right about the annual limit, so if you already had 2.4 million in growth allocation left to use in the next year, selling some of your growth allocation this year would likely not increase your 2.4 million allocation in the next year.

The sort of use case I saw suggested somewhere is, you might use some allocation and save for a house. Then sell it to buy your house, but then you’d be able to re-use the allocation from the next year on to save for your kids education costs (or higher taxes in future, haha)

Small scale day traders could also use it too, but only up to 2.4 million a year (I am ignoring the tsumitate here since I imagine that’s hard to use for anything but tsumitate), so it would probably not be so interesting for them, as they typically have to turn over way more than that to make decent profits(?). If I were a young kid again I would probably do this myself actually

[sutebayashi]

This other article confirms that the annual limits will always apply, irrespective of the re-invest aspect.

https://diamond.jp/articles/-/323290?page=2

This article also says that short term day trading is not possible, but I still think it is - just not a very good use perhaps Still if I was young and didn’t have much money, I think I’d be more interested in trying to turn my 200,000 yen into 300,000 yen fast, rather than over a multi year period… (just me maybe) maybe there will be some fun stories about this in coming years

[beanhead]

In the basic case, say if you buy 1,000,000 yen’s worth in your nisa during 2024, max your nisa out, but then sell what you bought for that 1,000,000 (no matter what it be worth now) before the end of 2029, from 2030 you should be able to buy 1,000,000 more again.

There is no 5-year period from 2024. It is forever/eternal/"until the end of time" NISA.

[nanaya]

I'm wondering, given these steps:

1. put in 100000
2. it grows to 150000
3. take out 50000

how much of the limit will I get back? 25000? how is it calculated? is it by number of stocks multiplied by original purchase price?

what if the purchases span over several months/years? is it by average? or based on original purchase price? in that case, in what order?

[TokyoBoglehead]

I'm wondering, given these steps:

1. put in 100000
2. it grows to 150000
3. take out 50000

how much of the limit will I get back? 25000? how is it calculated? is it by number of stocks multiplied by original purchase price?

what if the purchases span over several months/years? is it by average? or based on original purchase price? in that case, in what order?

The limit is a contribution amount. The value of the current holdings are irrelevant.

[Roger Van Zant]

One thing I am confused by is when people say : "You can sell and reinvest in the 新NISA as long as you don't go over the annual limit".
But this has always been the case, no?

With my つみたてNISA, the annual limit has always been 400,000 yen.

I could use up 100,000 yen's worth, sell it, and still have 300,000 yen left to use.
So selling and reinvesting is not an issue, as long as I don't max out the 400,000 yen limit.

What are people talking about with regard to the 新NISA? What's the difference?

[TokyoBoglehead]

I could use up 100,000 yen's worth, sell it, and still have 300,000 yen left to use.
So selling and reinvesting is not an issue, as long as I don't max out the 400,000 yen limit.

What are people talking about with regard to the 新NISA? What's the difference?

Example 1 - Classic Regular Nisa -> 1,2000,000 year. Lifetime total Contribution Limit - > 6,000,000.

A. If your Nisa account had 6,000,000 yen total, (5 years' worth of investment) And you sold 3,000,000 yen. That is it. No more space for you. You "used it up".

The only possible way your Nisa can grow now is through your investment increasing in value. No more contributions.

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Example 2 - New Nisa -> 3,6000,000 year. Lifetime total Contribution Limit - > 18,000,000.

B. You have 18,000,000 yen. A full Regular Nisa. You sell 5,000,000 yen to put a downpayment on a house in 2030.

In 2031 you can put 3,600,000* yen into your account
In 2032 you can put 1,400,000 yen into your account