Investment Boost lets a business deduct 20% of the cost of a new asset in the year it's bought, on top of normal depreciation. It applies to assets acquired, and first used or available for use, on or after 22 May 2025. There's no cap on value and no limit on the number of assets.
How It Works
In the year you buy the asset, you claim:
Investment Boost: 20% of the cost.
Normal depreciation on the remaining 80%.
Example: A contractor buys a new $100,000 excavator. They claim $20,000 of Investment Boost. Depreciation for the first year is then worked out on $80,000, not $100,000. The deduction is optional. You don't have to claim it.
If you're GST-registered, the cost is generally the GST-exclusive price.
What Qualifies
Most new assets that are depreciable for tax, including:
machinery, plant and equipment
work vehicles, for the business-use share only
tools and equipment that aren't fully written off as low-value assets
new commercial and industrial buildings, even though they can't be depreciated
improvements to a qualifying asset
for farms and growers: improvements to farmland, planting listed horticultural plants (such as a new kiwifruit block), improvements to aquaculture and forestry land
second-hand assets imported from overseas that haven't been used in New Zealand before
What Doesn't Qualify
second-hand assets that have already been used in New Zealand
land
trading stock
residential buildings, such as houses and rental properties
fixed-life intangibles, such as patents
assets fully expensed under other rules, such as low-value assets
Examples
Dairy farm: new effluent system, $60,000. Investment Boost of $12,000, then depreciation on $48,000.
Kiwifruit grower: develops a new SunGold block. Qualifying horticultural planting and new structures can attract the 20%. The cost of the land and any Zespri licence doesn't.
Builder: buys a new ute for $70,000 and uses it 80% for business. Investment Boost applies to the business share: 20% × $56,000 = $11,200. The rest of the claim follows the business-use split.
Second-hand tractor bought locally: doesn't qualify, because it has already been used in New Zealand. Normal depreciation still applies.
Selling the Asset Later
Investment Boost reduces the asset's tax book value. If you sell it for more than that value, some or all of the deduction can be clawed back as taxable depreciation recovered. It's a timing benefit, not a permanent one, for assets you sell later.
Plan the Cash, Not Just the Tax
A 20% deduction saves tax at your tax rate, not 20% of the price. For a company paying 28% tax, a $100,000 asset saves about $5,600 in the first year from Investment Boost alone. Make sure the purchase still makes sense for your cash flow and your bank.
How Ake Can Help
We can check which purchases qualify, work out the tax saving before you buy, and make sure the claim is made correctly in your return. Contact us before a big purchase.
This guide is general information, not tax advice. Your situation will be different, so talk to us before you act.