Investment Boost Calculator NZ
This calculator works out how much tax you save in year one from New Zealand's Investment Boost, the Budget 2025 incentive that applies to eligible new depreciable business assets first used or available for use on or after 22 May 2025. Investment Boost lets you deduct 20% of an asset's cost upfront, then claim normal depreciation on the remaining 80% in the same year. Enter the GST-exclusive asset cost, choose an asset type preset (general plant, computers and IT hardware, tools, a light commercial vehicle or a commercial building) or enter a custom depreciation rate, then select your tax rate from company, trust, top personal or lower personal bands, or enter a custom rate. The results show the upfront 20% deduction, the total first-year deduction combining the boost and depreciation, the tax saved in year one, and the extra amount that is compared with claiming depreciation alone, plus a side-by-side breakdown with and without the boost and a table comparing outcomes at different depreciation rates. Because the 20% reduces the asset's tax book value, it is recoverable as taxable income if you later sell the asset for more than its adjusted value, so this is a timing benefit rather than a permanent saving. This calculator gives an indicative first-year estimate only and is not tax advice; confirm eligibility and figures with Inland Revenue or your accountant.
1. The Asset
2. Your Tax Rate
With Investment Boost
Without Investment Boost
First-Year Deduction at Different Depreciation Rates
| Depreciation rate | Upfront 20% | Depreciation on 80% | Total deduction | Tax saved | Extra vs no boost |
|---|
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.
Related Calculators
- Depreciation Rate Finder: look up the IRD depreciation rate for your asset.
- Company Tax and Imputation Calculator: company tax and imputation credits.
- Provisional Tax Calculator: estimate your provisional tax instalments.
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.