Investment Boost has now been available since May 2025, but many businesses still aren't making the most of it.
The initiative was designed to encourage business investment, by allowing businesses to claim part of their tax deduction upfront, rather than waiting to recover the full benefit over several years through normal depreciation.
What Assets Are Eligible?
Investment Boost applies to most depreciable business assets that are new, or new to New Zealand, and first available for use on or after 22 May 2025. Examples include:
- Vehicles
- Farm equipment
- Machinery
- Tools and equipment
- Computers and technology
- Commercial buildings
How does it work?
Businesses can claim an immediate deduction of 20% of an eligible asset's cost in the year it is first available for use. The remaining 80% is depreciated under the normal tax rules.
The example below compares a $10,000 asset with and without Investment Boost, assuming a 20% straight-line depreciation rate. While the total deduction remains the same, Investment Boost brings more of the tax benefit forward into the year of purchase.
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Deductions with Investment Boost
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Deductions without Investment Boost
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Year of purchase
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20% deduction: $2,000
Depreciation: $1,600
= $3,600
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$2,000
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Year 1
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$1,600
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$2,000
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|
Year 2
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$1,600
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$2,000
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Year 3
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$1,600
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$2,000
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Year 4
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$1,600
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$2,000
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How to claim the Investment Boost
The deduction is included in your business’s income tax return for the year the asset first becomes available for use and is included alongside your normal depreciation claim.
As with any tax claim, good record-keeping is important. Businesses should retain invoices, purchase agreements, and other supporting documentation showing the cost of the asset and when it was first used.
For assets with both business and private use, such as a motor vehicle, only the business-use portion is eligible for the deduction. Keeping accurate usage records will help ensure the correct claim is made.
Thinking About Your Next Business Purchase?
If you're considering purchasing new equipment, upgrading technology, replacing a vehicle, or investing in commercial property, it's worth understanding the tax implications before making a decision.
If you're unsure whether an asset qualifies or would like advice on how the rules apply to your situation, get in touch with the team at Ean Brown Partners. We're here to help you make the most of the opportunities available.