Written by Accountants on Domain
Earlier this year, as part of Budget 2025, Minister for Finance Nicola Willis introduced the Investment Boost — a tax measure designed to reduce the cost of investing in new assets and equipment for Kiwi businesses.
This is your reminder that the scheme officially took effect from 22 May 2025, so now’s the time to plan ahead to make the most of it.
The initiative is expected to lift New Zealand’s GDP by 1% and wages by 1.5% over the next twenty years, with half of those gains forecast in the next five. Let’s take another look at what’s on offer — and how it can benefit your small business.
Key date
Investment Boost applies to new assets available for business use on or after 22 May 2025.
What is the Investment Boost?
The Investment Boost gives all Kiwi businesses — regardless of size or type — a 20% tax deduction on the cost of eligible new assets.
From 22 May 2025, you can claim 20% of the cost as an immediate expense, then depreciate the remaining 80% as usual.
This effectively lowers the upfront cost of upgrading or expanding your business and helps free up cashflow because you will pay less tax in the year the asset is purchased.
What Assets Qualify?
To qualify, the asset must be:
- New or new to New Zealand
- Available for business use on or after 22 May 2025, and
- Depreciable for tax purposes, e.g. worth more than $1000
Eligible items include:
- New commercial and industrial buildings
- Improvements to depreciable property (but not residential buildings)
- Primary sector land improvements
- Expenditure incurred on or after 22 May 2025 (excluding rights, permits or privileges)
What you Can’t Claim
You cannot claim for:
- Second-hand assets sourced within New Zealand
- Residential rental buildings
- Most fixed-life intangible assets (e.g. patents)
How to Claim the Investment Boost
You can claim the Investment Boost in your income tax return for the financial year in which you purchase an eligible asset.
For example, if you buy a new asset on 23 May 2025, include the Investment Boost in your 2026 income tax return (covering the financial year ending 31 March 2026).
5 Ways to Make the Most of the Investment Boost
Here are five ways to prepare and maximise this incentive:
- Invest in technology and AI to boost productivity. Use the 20% deduction to invest in new machinery, software, or AI tools. These upgrades can help you modernise, automate, and stay competitive.
- Increase wages and attract new talent. Boosting productivity with better equipment often increases profitability — giving you the flexibility to offer more competitive pay and benefits.
- Upgrade and future-proof your business. Take advantage of the scheme to replace aging equipment, modernise your facilities, or invest in new infrastructure so you’re ready for whatever’s next.
- Invest in sustainable assets. Put your tax savings toward eco-friendly investments — electric vehicles, renewable energy systems, or energy-efficient equipment — to reduce costs and your carbon footprint.
- Reinvest in growth and new revenue streams. Use the freed-up capital from your lower tax bill to expand, innovate, or upskill your team — all moves that support long-term growth.
Talk to Us About Making the Most of Investment Boost
If you’re planning to invest in new assets or equipment, the Investment Boost is here!
Our team at Accountants on Domain can help you:
- Identify what qualifies for the deduction
- Calculate the potential savings
- Time your purchases for maximum tax benefit
- Integrate the deduction into your overall business plan
- Understand potential tax implications when the asset is eventually sold.
Book a consultation to discuss how you can take full advantage of the Investment Boost this year