The Government’s new Investment Boost initiative — announced in Budget 2025 — is designed to stimulate the economy by encouraging new investment. It does this by allowing businesses to immediately deduct 20% of the cost of eligible new assets for tax purposes.
What Assets Qualify?
- New depreciable assets first available for use on or after 22 May 2025
- Includes commercial buildings, improvements to farmland, forestry, aquaculture, mining, and more
- Improvements (like seismic strengthening) also qualify
- Excludes: Land, residential property, secondhand assets (unless new to NZ), intangible assets, and mining rights
What About Commercial Property?
- New commercial buildings qualify
- Capital improvements to existing buildings (from May 2025) also qualify
- Because buildings usually can’t be depreciated, this gives real tax value to improvements like seismic upgrades
Timing
- The asset must be “available for use” on or after May 2025
Key Points
- No asset value cap — applies to small or large investments
- Optional — you don’t have to claim it
- Can apply asset-by-asset — pick and choose where it makes sense
- Works like depreciation and may be recovered if you sell above book value
Additional information is available on the IRD website: https://www.ird.govt.nz/