Investment Boost

What is Investment Boost?

In the 2025 Budget the government released the investment boost scheme to allow businesses to claim an immediate 20% deduction on qualifying new assets within the first year they were purchased. Investment boost is designed to encourage businesses to invest in productive assets and help with cashflow in the current economic market.

What can be claimed?

New or new to New Zealand (even if it was used overseas in the past)

• first available for the business to use on or after 22 May 2025

• depreciable for tax purposes.

  
  

You can claim for:

• new commercial and industrial buildings

• improvements to depreciable property (but not residential buildings)

• primary sector land improvements

• assets arising from petroleum development expenditure and mineral mining development expenditure incurred on or after 22 May 2025 (except rights, permits or privileges)

• mixed-use assets.

An asset is considered new if:

• it has only ever been held by the seller with the purpose of selling and exchanging it. For Investment Boost purposes, a building can be treated as trading stock.

• any use by the seller was only to get the asset ready for sale, such as testing or trial runs.

Assets that cannot be claimed are:

• assets that have previously been used in New Zealand

• land (although land improvements, such as fencing, may be eligible)

• assets that will be held as trading stock

• residential buildings (dwellings)

• fixed-life intangible assets (such as patents)

• assets that are fully expensed under other rules (eg assets valued below $1,000).

• second-hand assets are generally not eligible for Investment Boost, but those that are sourced from overseas may be able to claim the deduction

What are the benefits?

• A larger deduction upfront means a lower taxable income in the early stages of the asset’s life, this reduces tax payable.

• Increases short term cash flow in for reinvestment

• Brings forward tax relief

  
  

Key points to understand

• Investment boost doesn’t give out extra deductions, it brings the deduction forward so they can be claimed sooner.

• Using investment boost will lower the deprecation claim for the asset in later years.

Investment Boost creates business opportunities if applied correctly. If you are unsure about how this could impact your business, or you’re planning to purchase new assets, get in touch with us today to understand the best way to apply it in your situation.

Example of Investment Boost claim in action

	Without Investment Boost	With Investment Boost
Cutting Machine Purchased June 25	$100,000	$100,000
Year 1 Investment Boost - 20%	$0	$20,000
Year 1 Depreciation Straight Line - 13.5% (10/12 months)	$11,250	$9,000
Year 2 Depreciation Straight Line - 13.5%	$13,500	$10,800
Year 3 Depreciation Straight Line - 13.5%	$13,500	$10,800
Year 4 Depreciation Straight Line - 13.5%	$13,500	$10,800
Year 5 Depreciation Straight Line - 13.5%	$13,500	$10,800
Year 6 Depreciation Straight Line - 13.5%	$13,500	$10,800
Year 7 Depreciation Straight Line - 13.5%	$13,500	$10,800
Year 8 Depreciation Straight Line - 13.5%	$7,750	$6,200
Total Depreciation & Investment Boost Claimed	$100,000	$100,000

To understand how you can benefit from Investment Boost, get in touch.

Disclaimer: The information provided in this article is general in nature and does not constitute personalised tax advice. You should consult with Business Studio before making decisions based on this content.