Landlords, tenants, and businesses across New Zealand can now take advantage of the government’s new investment boost scheme. This initiative provides a powerful incentive for investment in new assets. Whether building or upgrading a commercial property, fitting-out a tenancy, or acquiring new equipment to support business operations.
What is the Investment Boost?
The investment boost allows businesses to claim a 20% deduction on the cost of eligible new assets in the year they are acquired or first available for use. The remaining 80% of the cost is then depreciated normally across the asset’s useful life; meaning this is deductible but spread out over time using IRD’s (Inland Revenue Department) set depreciation rates for the type of asset Depreciation rate finder and calculator.
What can be Claimed?
To qualify, an asset 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.
Examples of eligible claims include:
- New commercial and industrial buildings.
- Improvements to depreciable property (excluding residential buildings).
- Primary sector land improvements.
- Assets arising from petroleum and mineral mining development expenditure on or after 22 May 2025 (excluding rights, permits, or privileges).
- Mixed-use assets.
There is no limit to the value of new investments you can claim Investment Boost for.
Example: Property Fit outs and Mixed-use Assets
Imagine a landlord and tenant partnership where the landlord invests in a $500,000 upgrade to a commercial building, installing new HVAC systems, upgrading to LED lighting, and updating the kitchen and bathroom. At the same time, the tenant invests $200,000 in fit-out works to create tailored office and warehouse space for their operations.
- The landlord can claim an immediate $100,000 deduction (20% of their $500,000 upgrade) in the year the improvements are completed, with the remaining $400,000 depreciated across the asset’s useful life.
- The tenant can also claim a $40,000 deduction (20% of their $200,000 fit-out) in the first year, with the balance depreciated normally.
How Mixed-use Assets are Treated
To qualify for the full 20% deduction, the asset must be used primarily for business purposes. Where there is a personal element, only the business use portion can be claimed.
For example:
- If a tenant installs a $100,000 fit-out in a mixed-use space (80% business use, 20% private), the immediate deduction will apply only to the business use portion, $16,000 (20% of $80,000).
How to Claim
Businesses can claim the investment boost in their income tax return for the year the new asset is purchased. The deduction is recorded in the same way as depreciation and must be included in the Financial Statements Summary (IR10) or equivalent financial accounts Complete a Financial statements summary – IR10.
Key Takeaway
The investment boost represents a valuable opportunity for landlords, tenants, and businesses to enhance their asset base while maximising tax efficiency. By combining an upfront 20% deduction with standard depreciation, the scheme incentivises investment, drives growth, and strengthens long-term asset value.
Importantly, there is no limit to the value of qualifying investments, meaning whether you’re funding a small fit-out or a multi-million-dollar development, the benefits still apply.
From small refurbishments to full-scale renovations, we’ve managed plenty of projects on behalf of our clients. If you’re weighing up your next move and want some practical advice, we’re happy to guide you through the process. Get in touch here.
