Investment Boost: What It Means for Your Business
Let’s be honest—running a business isn’t cheap. So when the Government introduces a new tax incentive to ease the cost of upgrading or investing in your business, it’s worth taking a closer look.
As part of Budget 2025, the Government announced Investment Boost—a tax deduction designed to encourage Kiwi businesses to invest in new assets and equipment. Here's a breakdown of what it is and how your small business could benefit.
What is Investment Boost?
From 22 May 2025, businesses can:
Immediately deduct 20% of the cost of eligible new assets
Depreciate the remaining 80% as usual over time
This upfront deduction reduces the cost of investment and improves cashflow when you purchase new qualifying assets.
What can you claim?
To be eligible, the asset must be:
New, or new to New Zealand
Available for business use on or after 22 May 2025
Depreciable for tax purposes
You can also claim for:
New commercial and industrial buildings
Improvements to depreciable property (excluding residential buildings)
Primary sector land improvements
Petroleum and mineral development assets
Expenditure from 22 May 2025 onwards (excluding rights, permits, or privileges)
What can’t you claim?
Some items are excluded under the scheme. These include:
Second-hand assets sourced from within New Zealand
Residential rental buildings
Most fixed-life intangible assets (e.g. patents)
How do you claim it?
The Investment Boost is claimed in your income tax return for the year the asset is purchased.
For example:
If you buy a qualifying asset on 23 May 2025, the deduction is included in your 2026 income tax return (financial year ending 31 March 2026).
How to make the most of Investment Boost
Here are five practical ways to take advantage of this incentive:
1. Upgrade your technology and equipment
Invest in new tools, software, or machinery to improve productivity and streamline your operations. It’s a smart way to stay competitive while easing the cashflow hit.
2. Boost wages and attract talent
When you improve productivity with better tools and equipment, your profitability often improves too. That extra margin gives you the financial headroom to offer more competitive wages or staff benefits.
In today’s tight labour market, this can make all the difference in attracting and retaining good people—especially if your business is competing with larger employers. The Investment Boost can support this indirectly by freeing up cash you might otherwise spend on tax.
3. Future-proof your business
Use the incentive to replace outdated equipment, upgrade your premises, or invest in infrastructure that supports long-term resilience.
4. Invest in sustainability
Put the tax savings toward environmentally friendly assets like electric vehicles, energy-efficient equipment, or renewable energy solutions.
5. Reinvest in growth
Free up capital to expand into new markets, develop new products or services, or upskill your team to take your business to the next level.
Talk to us
Thinking about buying new assets or upgrading your business systems? Investment Boost might be the perfect opportunity to act.
If you’re unsure what qualifies, or want help planning your next move, get in touch. We’re here to help you make the most of it.