If you’re an Australian small business expanding into New Zealand, the 2025 NZ Budget has introduced a major incentive you’ll want to know about — the Investment Boost scheme.
Designed to encourage productivity and growth, this initiative lets eligible businesses claim an upfront 20% tax deduction on new investment assets.
Whether you’re buying equipment, developing property, or improving farmland, understanding how to qualify could deliver significant tax savings for your NZ operations.
What Is the Investment Boost Scheme?
Announced as part of Budget 2025, the Investment Boost is a new tax measure aimed at stimulating business investment and productivity in New Zealand. It allows businesses to claim a one-off deduction of 20% of the cost of new investment assets purchased on or after 22 May 2025, in the year of purchase.
This deduction is in addition to normal depreciation deductions, which are then calculated as if the asset’s cost were reduced by 20%. Importantly, the Investment Boost deduction also qualifies as eligible expenditure for research and development (R&D) tax credits, offering even broader benefits for innovative businesses.
What Assets Qualify?
The Investment Boost applies broadly to tangible, productive assets — for example, machinery, vehicles, IT equipment, and new commercial or industrial buildings. Even though commercial buildings have a 0% depreciation rate, they still qualify for the 20% Investment Boost deduction.
Projects that started before Budget 2025 may also qualify, provided the asset is first used (or available for use) on or after 22 May 2025, and all other eligibility criteria are met.
Eligible categories include:
- New commercial and industrial buildings
- Farm and forestry land improvements
- Planting of listed horticultural plants
- Aquacultural improvements
- Certain petroleum or mineral mining development expenditure
How Does It Work in Practice?
For example, if your NZ entity purchases new production machinery for NZD $100,000 in October 2025, you could claim an upfront $20,000 Investment Boost deduction in that income year. You would then calculate ongoing depreciation on the remaining $80,000 value.
If you later sell the asset for more than its adjusted tax value, a portion of the earlier deductions — including the Investment Boost — may be clawed back as taxable income. However, clawback does not apply to certain primary sector land improvements made after 22 May 2025.
Why It Matters for Australian Businesses
For Australian-owned companies operating across the Tasman, this new measure offers an immediate cashflow advantage when expanding or upgrading in New Zealand. It’s particularly attractive for businesses setting up new facilities, investing in infrastructure, or modernising operations.
However, to make the most of it, you’ll need to ensure correct asset classification, timing, and record-keeping. Poor documentation or incorrect application of depreciation rules could result in compliance issues later.
Talk to the NZ Tax Experts
At NZ Tax Accountants Pty Ltd, our team of Australia-based New Zealand tax specialists can help you assess eligibility and correctly apply the Investment Boost to your NZ operations. We focus solely on New Zealand tax, ensuring your business is compliant while maximising available benefits.
If you’re planning to invest or expand in New Zealand, now’s the time to act.
Contact us today to discuss how the Investment Boost could work for your business.
The information in this article is indicative of NZ tax rules and changes and not intended to be complete for all intents or purposes and does not constitute advice. It is recommended that you obtain professional advice, suited to your particular circumstances, from us before acting on anything you read.