Low-Value Asset Write-Off Calculator NZ 2026/27

Quick answer: In New Zealand, a business asset that costs $1,000 or less can be written off in full in the year you buy it, instead of being depreciated over several years. If you are GST-registered you test the GST-exclusive cost against $1,000; if you are not, you test the full GST-inclusive cost. Anything over $1,000 must be capitalised and depreciated. Enter an asset cost below to see the verdict and your first-year tax saving.

This low-value asset write-off checker tells you, in one step, whether a business asset can be claimed as an immediate tax deduction or has to be capitalised and depreciated over its life. New Zealand tax rules let you fully deduct the cost of a depreciable asset in the year you buy it if that cost is $1,000 or less, a threshold that has applied since 17 March 2021. Assets above the threshold have to go on your fixed asset register and are written off gradually through annual depreciation instead. Enter the total cost you paid, tell the calculator whether you are registered for GST, and choose your marginal tax rate. It works out the correct cost basis (GST-exclusive if you are registered, GST-inclusive if you are not), compares it to the $1,000 threshold, and shows a clear verdict along with the first-year deduction and the tax that deduction saves you. If the asset is over the threshold, it estimates the first-year depreciation using a rate you can adjust. It updates instantly as you type, with no button to press. Use it before you buy so you know whether a purchase reduces this year's tax bill or is spread across several years. Treat the result as a guide and confirm anything unusual with your accountant or Inland Revenue.

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Updated  Current rates and legislation applied.

Verification & Methodology

Threshold: $1,000 or less for assets bought on or after 17 March 2021 (previously $500, and $5,000 for assets bought between 17 March 2020 and 16 March 2021), under the low-value asset rules in section EE 38 of the Income Tax Act 2007.
GST basis: GST-registered businesses test the GST-exclusive cost; non-registered persons test the GST-inclusive cost. GST is extracted with the IRD 3/23 fraction.
Marginal tax rates: 2026/27 income tax brackets (10.5%, 17.5%, 30%, 33%, 39%) plus the 28% company rate, read from the site's central paye-data.js file and verified against Inland Revenue's published rates.
Depreciation: First-year depreciation on assets over the threshold uses the diminishing value rate you enter. Look up the correct rate for your asset in Inland Revenue's Depreciation Rate Finder.
Last verified: 26 July 2026, against Inland Revenue's depreciation and low-value asset guidance.
Source data: Inland Revenue (ird.govt.nz) and the Income Tax Act 2007.

Worked example: a chair and a laptop

Aroha is a self-employed graphic designer, registered for GST, on taxable income of about $70,000, so her marginal tax rate is 30%. In March she buys two things for her studio: an ergonomic office chair for $1,035 including GST, and a new laptop for $2,300 including GST.

The chair. Because Aroha is GST-registered, she tests the GST-exclusive cost. Using the IRD 3/23 method, the GST content is $1,035 × 3 ÷ 23 = $135.00, leaving a GST-exclusive cost of $900.00. As $900.00 is $1,000 or less, the chair qualifies as a low-value asset. Aroha claims the whole $900.00 as a deduction in the year she buys it. At her 30% marginal rate, that deduction reduces her tax by $900.00 × 30% = $270.00. She also claims the $135.00 of GST on her GST return, as she would for any business purchase.

The laptop. The GST-exclusive cost of the laptop is $2,300 × 20 ÷ 23 = $2,000.00. That is more than $1,000, so it cannot be written off immediately. Instead it goes on Aroha's fixed asset register and is depreciated over its useful life. If the Inland Revenue rate for that laptop is, for example, 30% on the diminishing value basis, the first-year depreciation is $2,000.00 × 30% = $600.00, saving $600.00 × 30% = $180.00 of tax in year one. The remaining $1,400.00 of cost is deducted through depreciation in later years. Aroha should confirm the exact rate for her asset using Inland Revenue's Depreciation Rate Finder.

The contrast is the whole point of the threshold. The chair gives Aroha a $270 tax saving this year; the more expensive laptop gives her only $180 this year, with the rest spread across future years. Keeping individual purchases at or below $1,000 (on the correct GST basis) accelerates the tax benefit, which is why the low-value asset rule is worth understanding before you buy.

How the low-value asset write-off works

Normally, when a business buys an asset that will last more than a year, such as a computer, a power tool or a piece of furniture, that cost is not deducted all at once. Instead the asset is capitalised and its cost is spread across several income years through depreciation, which is meant to reflect the asset wearing out over time. The low-value asset rule is a practical exception. Rather than making businesses track and depreciate every cheap item, Inland Revenue lets you deduct the full cost of a qualifying asset in the year you buy it, as long as the cost is at or below the threshold. This saves a great deal of record-keeping and brings the tax deduction forward, which is good for cash flow.

To qualify, the asset must be one you would otherwise depreciate: something used in earning your assessable income that has a useful life of more than a year. It must not become part of a larger asset you are building or that you already depreciate, and it must not have been bought together with other similar assets in a way that pushes the combined cost over the threshold (see the grouping rule below). If those conditions are met and the cost is $1,000 or less, you simply claim it as an expense in that year.

The $1,000 threshold and its history

The current threshold is $1,000, and it applies to assets bought on or after 17 March 2021. The figure has changed over time, so the date of purchase matters:

• Up to 16 March 2020: the threshold was $500.
• 17 March 2020 to 16 March 2021: the threshold was temporarily lifted to $5,000 as part of the Government's COVID-19 economic support, encouraging businesses to invest.
• From 17 March 2021 onwards: the threshold settled at $1,000, where it remains for the 2026/27 tax year.

If you are reviewing an older purchase, apply the threshold that was in force on the date you bought the asset, not today's figure. This calculator uses the current $1,000 threshold.

GST-inclusive or GST-exclusive?

The threshold is applied to your true cost, and your cost depends on whether you can claim back the GST. If you are registered for GST, the GST is not part of your cost because you claim it separately on your GST return, so you test the GST-exclusive cost against $1,000. If you are not registered for GST, the GST is a real cost to you, so you test the full GST-inclusive price you paid. This is why a $1,150 item can be a low-value asset for a GST-registered business (its GST-exclusive cost is exactly $1,000) but not for someone who is not registered (their cost is the full $1,150). The calculator handles this automatically once you tell it your GST status.

The grouping and anti-splitting rule

The most common way people get this wrong is trying to game the threshold. You cannot break a single asset into parts to get each piece under $1,000, and you cannot dodge the limit by buying a batch of similar items on one invoice. If you buy several assets from the same supplier at the same time, and those assets have the same depreciation rate, Inland Revenue treats them as a single purchase and applies the $1,000 threshold to the combined cost. For example, buying ten $150 chairs from one supplier in one order is a $1,500 purchase, not ten separate $150 low-value assets, so it must be depreciated. The rule looks at the substance of what you bought, not how the paperwork is arranged. Genuinely separate assets, bought at different times or from different suppliers, or with different depreciation rates, are tested individually.

What happens to assets over the threshold

An asset costing more than $1,000 (on the correct GST basis) has to be capitalised and depreciated. You add it to your fixed asset register and claim a depreciation deduction each year based on the Inland Revenue rate for that type of asset. Rates differ a lot: a computer depreciates faster than a building, for instance. Most assets use the diminishing value method, where the rate is applied to the remaining tax value each year, so the deduction is largest in the first year and tapers off. Some assets use the straight line method, where the same amount is deducted each year. This calculator estimates the first-year depreciation from a diminishing value rate you enter, but you should confirm the correct rate for your specific asset using Inland Revenue's Depreciation Rate Finder, and our Depreciation Calculator can work through the full schedule.

Who this calculator is for

This tool is for sole traders, contractors, freelancers and small business owners in New Zealand who buy their own equipment and want to know whether a purchase can be written off now or has to be depreciated. It is equally useful for landlords buying chattels for a rental, and for anyone doing their own end-of-year accounts who wants a quick, correct answer on the low-value asset threshold before coding a purchase. If you use an accountant, it is a handy way to understand the treatment before you talk to them.

What this calculator assumes

• The asset is a depreciable asset used to earn assessable income, and is not part of a larger asset or a grouped purchase that would breach the threshold.
• You bought the asset on or after 17 March 2021, so the $1,000 threshold applies.
• The GST-exclusive figure assumes a standard 15% GST-inclusive purchase; adjust if the item was zero-rated or GST-free.
• The first-year depreciation estimate assumes a full year of ownership and the diminishing value rate you enter. In practice depreciation is apportioned for the months you owned the asset, and the correct rate comes from Inland Revenue.
• The tax saving assumes you have enough taxable income to use the deduction, and that the whole asset is used for business. Private-use assets are apportioned.
• Results are indicative and rounded for display. Your filed return should rely on your own records.

Frequently asked questions

What is the low-value asset write-off threshold in New Zealand?

The threshold is $1,000. A business asset costing $1,000 or less can be deducted in full in the year you buy it, instead of being depreciated over several years. This $1,000 limit has applied to assets bought on or after 17 March 2021.

Is the $1,000 threshold GST-inclusive or GST-exclusive?

If you are registered for GST, test the GST-exclusive cost against $1,000, because you claim the GST separately. If you are not registered, test the full GST-inclusive price, because the GST is part of your cost.

Can I write off an asset that costs exactly $1,000?

Yes. The rule is $1,000 or less, so an asset costing exactly $1,000 on the correct GST basis qualifies. An asset costing $1,000.01 or more must be depreciated.

Can I split an asset or buy items separately to get under the threshold?

No. You cannot split a single asset into components, and if you buy several assets from the same supplier at the same time that have the same depreciation rate, they are treated as one purchase and the threshold applies to the combined cost. The rule looks at what you actually bought, not how the invoice is arranged.

Was the threshold ever $5,000?

Yes, temporarily. It was $500 until 16 March 2020, lifted to $5,000 for assets bought between 17 March 2020 and 16 March 2021 as COVID-19 support, then set at $1,000 for assets bought from 17 March 2021 onwards. Apply the threshold in force on the date you bought the asset.

Do I have to write off a low-value asset immediately?

Immediate write-off is the standard treatment and is optional. In almost all cases claiming the full deduction now is better for cash flow. In rare situations, such as a very low income year, spreading the deduction could suit you better, so ask your accountant if unsure.

Does the write-off apply to assets used partly for private purposes?

You can only deduct the business-use portion. If an asset is used partly privately, apportion the cost and claim only the business share. The threshold test still looks at the full cost of the asset.

How much tax does a write-off actually save me?

The deduction reduces your taxable income, so the cash saving is the deduction multiplied by your marginal tax rate. A $900 write-off saves $94.50 at 10.5%, $270 at 30%, $297 at 33%, or $351 at 39%. For a company, the saving is the deduction times the 28% company rate.