New Zealand’s Investment Boost: Powering Business Growth and Productivity
In its 2025 Budget, the NZ Government unveiled the Investment Boost, a major tax incentive aimed at encouraging businesses to invest in productive assets.
The goal: raise productivity, lift wages, and accelerate economic growth.
What is the Investment Boost?
- What it allows: From 22 May 2025, businesses can immediately deduct 20% of the cost of eligible new investment assets from their taxable income. On top of that, they can still claim depreciation on the remaining 80% in the usual way.
- What qualifies:
- Assets must be new or new to New Zealand and available for use on or after 22 May 2025.
- Includes machinery, tools, equipment, vehicles, technology, and even commercial/industrial buildings. Land, residential buildings, and certain intangible assets are excluded.
- Improvements to depreciable property are eligible — but not residential rentals.
What are the Benefits
- Cash flow benefits: By allowing a sizeable upfront deduction, claiming the boost can improve cash flows for businesses as it reduces taxable income. Qualifying investments can become more financially viable.
What Businesses Should Know
- No limit on eligible investment value — both small and large businesses can benefit.
- Timing is important: only assets available for use (or finished constructing) on or after 22 May 2025 count.
- There is a “claw-back” if the asset is later sold for more than its tax-adjusted value.
- It is treated like depreciation so in the fixed asset register the asset will need to be split:
- 20% of the value which will be depreciated immediately at 100%
- The remaining 80% of the value will be depreciated at normal depreciation rates
- For those using Xero software, their fixed assets register has been adapted to allow for the 20% deduction
- It is optional.
For any assistance in claiming the Boost, Alliott NZ would be happy to assist. Contact our team in Newmarket Auckland.
