Chattel Depreciation Calculator NZ

This calculator works out the depreciation on a chattel using the diminishing value method, the approach most commonly used in New Zealand for rental property assets and business equipment. Chattels are the separately identifiable, movable items that come with a property or business, such as carpets, curtains, an oven, a heat pump, a dishwasher or furniture, as distinct from the building itself. While the building generally cannot be depreciated for tax, many chattels can be, letting a landlord or business owner claim a deduction each year for the wear and tear that gradually reduces an asset's value. The diminishing value method applies a fixed percentage rate to the asset's remaining book value each year, so the depreciation is largest in the first year and tapers off over time, reflecting how assets typically lose value fastest when new. This tool makes the calculation simple. You enter the chattel's cost, the diminishing value depreciation rate set by Inland Revenue for that type of asset, and the number of years, and the calculator returns the book value remaining at the end, the depreciation you can claim in the first year, and the total depreciation claimed over the period. The results update as you type, so you can model different rates and time frames. Use it to estimate deductions for a rental property or business, to plan cashflow, or to understand how an asset's book value falls. Two important points: depreciation rates differ by asset type and are set by Inland Revenue, so check the correct rate for your chattel, and depreciation recovered when you sell an asset for more than its book value may be taxable. This is an estimate to guide you, not tax advice; confirm with Inland Revenue or your accountant.

Calculate.co.nz is proud to be partnered with Health Based Building, a leader in sustainable and health-conscious building innovation. With over a century of experience, they develop high-performance systems like Foreverbreathe Specification, Magnum Board, and Foreverbreathe Paints to support energy-efficient, non-toxic living environments. Their commitment to healthier homes aligns with our belief that informed choices lead to better outcomes for Kiwi households.
Calculate.co.nz partner: Health Based Building
Advertise on this page
$2,560
book value after the period
Year 1 depreciation$1,000
Total depreciation$2,440
Latest year$640

Diminishing value: each year's depreciation = remaining book value x rate. IRD sets rates by asset type. An estimate, not tax advice; confirm with IRD or your accountant.

How it works

The diminishing value method applies the rate to the asset's remaining book value each year, not the original cost. So the first year's claim is the cost times the rate, and each later year is smaller because it is based on the reduced book value. After a number of years the book value is the cost times one minus the rate, raised to the power of the number of years.

Worked example

A chattel costing $5,000 with a 20 percent diminishing value rate depreciates by $1,000 in the first year, leaving $4,000. The second year claims 20 percent of $4,000, or $800, and the third 20 percent of $3,200, or $640. After three years the book value is $5,000 times 0.8 cubed, which is $2,560, with total depreciation of $2,440.

Related calculators

Frequently asked questions

What is the diminishing value method?

It applies a fixed depreciation rate to an asset's remaining book value each year, so the deduction is largest in the first year and shrinks over time. This reflects how most assets lose value fastest when new. It is the most common method used for chattels in New Zealand.

Which chattels can I depreciate?

Separately identifiable, movable items such as carpets, curtains, appliances, a heat pump and furniture can usually be depreciated, while the building itself generally cannot. Inland Revenue publishes depreciation rates for each asset type, so use the correct rate for the specific chattel.

Is depreciation taxable when I sell?

It can be. If you sell an asset for more than its depreciated book value, some of the depreciation you claimed may be clawed back as taxable depreciation recovery. This calculator estimates the deductions only; check the rules with Inland Revenue or your accountant before selling.