Investment Boost Tax Incentive: What It Means for Your Business

A 20% instant deduction for eligible business assets is now available

In Budget 2025, the New Zealand Government introduced a new tax incentive designed to support businesses investing in growth.

Known as the “Investment Boost”, this incentive allows you to immediately deduct 20% of the cost of new capital assets from your taxable income in the year they are purchased — on top of the usual depreciation you can claim over time.

For many businesses, this represents a timely opportunity to improve cash flow, reduce tax liability, and reinvest back into operations.

What is the Investment Boost?

The Investment Boost is a partial expensing scheme now in effect for assets first used or available for use on or after 22 May 2025.

Here’s how it works:

Deduct 20% of the asset’s cost immediately in your current tax year.

Then, depreciate the remaining 80% over time as per standard rules.

This can significantly reduce the upfront tax burden on new investments.

What Types of Assets Qualify?

The incentive applies to most depreciable business assets, as long as they’re either:

• Brand new, or

• New to New Zealand

• Examples of eligible assets include:

• Machinery and plant equipment

• Commercial and industrial buildings

• Farm infrastructure (e.g., irrigation systems, fencing)

• Forestry and aquaculture land improvements

• Vehicles, technology, and office equipment

• Improvements to existing depreciable property (excluding residential)

• Even assets under construction before 22 May 2025 — but not yet in use — may be eligible.

What’s the Business Benefit?

This incentive is designed to encourage Kiwi businesses to invest in growth, innovation, and productivity. The immediate benefits include:

• Lower taxable income in the year of purchase

• Better cash flow management

• Stronger justification for upgrading outdated equipment or systems

Talk to Your Trusted Advisor 

Making the most of this opportunity isn’t just about numbers — it’s about strategy.

As your trusted financial advisor, Whiting Financial Services Ltd is here to:

Help you identify which assets qualify

Review your capital investment plans

Align your strategy with your broader financial goals

Ensure you meet all compliance and documentation requirements

Let’s Talk About What’s Right for Your Business

Whether you're considering a vehicle upgrade, farm infrastructure improvements, or a new office fit-out — let’s talk through the details together.

Don’t wait until year-end — this is an opportunity to act now and plan ahead.