Work out your first-year tax saving from the Investment Boost, the deduction announced in Budget 2025 and in force for eligible assets first used from 22 May 2025. You can deduct 20% of the cost of a new depreciable asset upfront, then claim normal depreciation on the remaining 80% of the cost in the same year.
Enter the asset cost, the depreciation rate, and your tax rate to see the total first-year deduction, the tax saved, and how much extra deduction the boost brings forward compared with depreciation alone.
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.
Updated June 2026
Investment Boost (Budget 2025), in force for assets first used from 22 May 2025. IRD guidance.
1. The Asset
$
% / yr
2. Your Tax Rate
%
% (fixed)
Your First-Year Investment Boost Result
Upfront 20% Deduction
-
20% of asset cost
First-Year Deduction
-
Boost + depreciation
Tax Saved (Year 1)
-
Deduction x tax rate
Extra vs No Boost
-
Brought-forward saving
With Investment Boost
Asset cost-
Upfront deduction (20%)-
Remaining base (80%)-
Depreciation rate-
First-year depreciation on base-
Total first-year deduction-
Tax rate-
Tax saved in year one-
Without Investment Boost
Asset cost-
Upfront deduction$0.00
Depreciation base-
First-year depreciation-
Total first-year deduction-
Tax saved in year one-
Extra deduction brought forward-
Extra tax saved (year one)-
First-Year Deduction at Different Depreciation Rates
Depreciation rate
Upfront 20%
Depreciation on 80%
Total deduction
Tax saved
Extra vs no boost
Summary:Enter your asset cost above.
Important: Investment Boost applies only to eligible new (or new-to-New Zealand) depreciable assets first used or available for use on or after 22 May 2025. Land and residential buildings are excluded, as are assets already used in New Zealand and most intangibles. The 20% upfront deduction reduces the asset's tax book value (adjusted tax value), so it can be clawed back as taxable income (depreciation recovery) if you later sell the asset for more than its adjusted tax value. This calculator shows an indicative first-year cash-tax effect only and is not tax advice. Confirm eligibility and your figures with IRD or your accountant.
What Is the Investment Boost?
Investment Boost is a business tax incentive announced in Budget 2025. For eligible assets that are first used or available for use on or after 22 May 2025, a business can immediately deduct 20% of the asset's cost in the year it is first used. Normal tax depreciation is then claimed on the remaining 80% of the cost, starting in the same year. The aim is to encourage businesses to invest in new productive assets by bringing forward a meaningful part of the tax deduction.
The boost is not a cash grant or a credit. It is an extra deduction against your taxable income. The actual benefit depends on your tax rate, because the deduction reduces the income you pay tax on. There is no cap on the cost of a qualifying asset and no limit on the number of assets you can claim it for.
How the Calculation Works
The first-year deduction has two parts:
Upfront deduction: asset cost multiplied by 20%.
First-year depreciation: the remaining 80% of the cost (the new depreciation base) multiplied by the asset's depreciation rate.
Add those together to get the total first-year deduction, then multiply by your tax rate to estimate the tax saved. Compared with the deduction you would have had without the boost (cost multiplied by the depreciation rate), the difference is the extra deduction brought forward into year one.
Worked Example
A company buys a new $100,000 piece of plant with a 10% diminishing-value depreciation rate, and pays the 28% company tax rate:
Upfront deduction: $100,000 x 20% = $20,000
Remaining depreciation base: $100,000 x 80% = $80,000
First-year depreciation: $80,000 x 10% = $8,000
Total first-year deduction: $20,000 + $8,000 = $28,000
Tax saved in year one: $28,000 x 28% = $7,840
Without the boost, the first-year deduction would be $100,000 x 10% = $10,000, saving $2,800 in tax. So Investment Boost brings forward an extra $18,000 of deduction and an extra $5,040 of tax saved in year one. This matches the default output of the calculator above.
What Assets Qualify?
Asset
Qualifies?
New plant, machinery and equipment
Yes
New tools and work vehicles
Yes
New commercial or industrial buildings
Yes
Second-hand assets new to New Zealand (imported)
Yes
Assets already used in New Zealand
No
Residential buildings
No
Land
No
Trading stock and most intangibles
No
The asset must be first used or available for use in the business on or after 22 May 2025. The deduction is claimed in that income year.
The 20% Reduces Your Tax Book Value
Because the upfront 20% is a deduction, it lowers the asset's adjusted tax value just like depreciation does. If you later sell the asset for more than its adjusted tax value, the excess (up to the total deductions claimed) is taxable as depreciation recovery income. In other words, Investment Boost is a timing benefit: it brings the deduction forward rather than creating a permanent new one. The cash-flow advantage of getting that deduction sooner is still real and can be significant.
Diminishing Value vs Straight Line
Most assets in this calculator use diminishing-value (DV) depreciation rates, which apply the rate to the remaining book value each year. If your asset uses a straight-line (SL) rate instead, enter the SL rate in the depreciation rate field. The first-year calculation is the same: the rate is applied to the remaining 80% of the cost. From year two onwards the path differs between DV and SL, but Investment Boost only changes the first year.
Sources: Inland Revenue, New assets - Investment Boost (ird.govt.nz). New Zealand Government, Budget 2025 (budget.govt.nz). Income Tax Act 2007 depreciation provisions (legislation.govt.nz).
This calculator provides indicative estimates only and is not tax or financial advice. Investment Boost rules, eligibility and rates may change. The benefit is a timing benefit and the 20% deduction can be recovered as income on sale. Confirm your situation with Inland Revenue or a qualified accountant before relying on these figures.
Calculate.co.nz is partnered with Interest.co.nz for New Zealand's highest quality calculators and financial analysis.
Calculate.co.nz is the sister site of CalculatorHub.com, the world's largest calculator website by tool count.
All calculators and tools are provided for educational and indicative purposes only and do not constitute financial advice.
Calculate.co.nz is proudly part of the Realtor.co.nz group, New Zealand's leading property transaction literacy platform, helping Kiwis understand the home buying and selling process from start to finish. Whether you're a first home buyer navigating your first property purchase, an investor evaluating your next acquisition, or a homeowner planning to sell, Realtor.co.nz provides clear, independent, and trustworthy guidance on every step of the New Zealand property transaction journey.
Calculate.co.nz is also partnered with Health Based Building and Premium Homes to promote informed choices that lead to better long-term outcomes for Kiwi households.
All content on this website, including calculators, tools, source code, and design, is protected under the Copyright Act 1994 (New Zealand). No part of this site may be reproduced, copied, distributed, stored, or used in any form without prior written permission from the owner.
