Investment Boost: How to maximise the benefits of this new scheme

As part of Budget 2025, the Minister for Finance introduced Investment Boost – a new way for Kiwi businesses to reduce the cost of investing in new assets and equipment.

Investment Boost is expected to lift NZ GDP by 1% and wages by 1.5% over the next twenty years, with half these gains in the next five years.

Let’s look at the benefits of the scheme and how it could help your small business.

What does Investment Boost offer?

Investment Boost is a new tax deduction that’s available to all Kiwi businesses, whatever the size of your business or your business type.

From 22 May 2025, you can claim 20% of the cost of new assets as an expense, then claim depreciation as usual on the remaining 80%.

What can you claim?

To claim Investment Boost, the asset you purchase must be:

• New or new to New Zealand
• Available for the business to use on or after 22 May 2025, and
• Depreciable for tax purposes.

You can also 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)

What can you NOT claim?

There are some limitations on which assets you claim for under the Investment Boost scheme.

You cannot claim for:

• second-hand assets that are sourced from New Zealand
• residential rental buildings
• most fixed-life intangible assets (such as patents)

How can you make a claim?

You can claim the Investment Boost in your income tax return for the financial year in which you purchase a new eligible asset.

For instance, if you buy a new asset on May 23, 2025, include the Investment Boost amounts in your 2026 income tax return (which covers the financial year ending March 31, 2026).

How to maximise this tax incentive

So, that’s the lowdown on how the Investment Boost scheme works. But how can you use this tax incentive to make a tangible difference for your small business?

Here are five ideas to get you started.

1. Invest in technology and AI to boost your productivity:

Use the 20% tax deduction to buy new machinery, software (including AI tools) and equipment. This direct cashflow benefit makes modernising your operations more affordable and, with new, cutting-edge equipment and tech, you can give yourself a real competitive edge.

2. Increase wages and attract new talent:

By investing in new assets that boost productivity, your business can generate more revenue and improve profitability. This financial uplift helps you offer competitive wages and benefits, making your business a more attractive employer in the currently tight labour market.

3. Upgrade and future-proof your business:

In an unstable economic climate, the Investment Boost encourages proactive investment. By replacing aging equipment, upgrading commercial buildings, or investing in new infrastructure you’re better prepared to weather the economic ups and downs that lie ahead.

4. Investment in sustainable assets to assist with climate change threats:

Use the tax savings from the Investment Boost to invest in environmentally friendly assets. This could include purchasing electric vehicles for your fleet, installing energy-efficient machinery, or investing in renewable energy solutions for your premises.

5. Reinvest in growth and new revenue streams:

The lower tax bill from the Investment Boost frees up more capital. Reinvest these savings into areas that fuel growth. This could include expanding your product lines, entering new markets, increasing marketing efforts, or providing advanced training for your team.

If you’re looking to invest in new assets and equipment, Investment Boost has come along at exactly the right time. Come and talk to our team about maximising this tax incentive.