End of year tax boost
Introduced in 2025 and designed to stimulate capital spending and support economic growth in the form of accelerated depreciation, the government’s Investment Boost scheme allows a further 20% depreciation on the purchase price of new qualifying assets in the financial year of acquisition, on top of standard depreciations that normally apply.
Insights with Infinance by Brian Coogan.
That means purchases made before the end of the financial year, March 31, 2026, can bring forward significant tax savings, reducing this year’s taxable income and freeing up cash for reinvestment. That immediate deduction can translate to firms being more comfortable committing to new assets now rather than later.
To qualify, assets must be new (or new to NZ), depreciable for tax purposes and purchased on or after May 22, 2025.
Eligible assets include new business vehicles, plant, equipment and machinery, technology, new commercial and industrial buildings, improvements to existing business assets, primary sector land improvements and mixed-use business assets.
Previously used overseas, new to NZ assets are also eligible as are NZ new assets having had minor use such as demonstrator vehicles and equipment and floor stock held for sale.
Exclusions include secondhand assets already used in NZ, residential rental properties and intangible assets such as patents.
The aim of Investment Boost is to improve business cashflow, lower the after-tax cost of investment and make previously marginal projects more attractive.
By accelerating tax deductions into the current year, the Government expects firms to upgrade machinery, equipment, vehicles and even commercial buildings sooner rather than later — boosting productivity and supporting broader economic activity. This applies to assets purchased outright or under finance.
As always, your source of truth for tax matters is your accountant or tax professional who we recommend consulting before engaging in capital expenditure.
For more on the above visit www.ird.co.nz and search Investment Boost or go to www.infinance.co.nz/insights for a direct link.
Written by Brian Coogan, Licensed Financial Adviser and Director at Infinance Taupo.
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