27 May, 2025
Budget 2025: Tax Incentives Create Opportunities for Businesses to Invest in
Equipment and Assets
Following the latest Budget 2025 announcement, it’s now easier for businesses to invest in assets and equipment that help boost efficiency and drive long-term productivity.
The Government has introduced a significant new tax incentive to encourage asset and equipment investment, allowing businesses to claim larger deductions upfront.
From 22 May 2025, businesses can claim an immediate 20% tax deduction on the cost of eligible new or new-to-New Zealand assets, including improvements to existing assets. This marks a major change from previous depreciation rules, providing businesses with an opportunity to maximise these tax benefits and invest in new equipment or assets.
How Does It Work?
Under the new Investment Boost tax rule:
- Deduct 20% upfront of the cost of eligible new assets (or improvements to existing assets).
- Continue to claim regular depreciation on the remaining 80% of the asset value over time.
For example, if your business purchases a new piece of equipment for $100,000, you can immediately deduct $20,000 in the first year. Additionally, you continue depreciating the remaining $80,000 (e.g., $8,000 if the depreciation rate is 10%), resulting in a total first-year deduction of $28,000 compared to $10,000 under the old rules. This faster write-off improves cash flow and reduces tax liability sooner, freeing up capital for other investments or operational needs.
Business assets that are eligible are new or new-to-New Zealand depreciable assets, including machinery and equipment, commercial vehicles, and capital improvements to existing assets.
Exclusions include second-hand assets already used in New Zealand, land, trading stock, residential buildings (there will be exceptions for hotels, hospitals, and rest homes), fixed-life intangible assets, and assets that are expensed under other rules (for example, low-value assets below $1,000).
At Speirs Finance, we’re excited about this new tax incentive and the opportunities it creates for businesses. Whether you’re upgrading existing equipment, investing in new assets, or making capital improvements, our flexible finance solutions are designed to help you achieve your business goals. Contact us to learn how we can support funding your next asset purchase—and help you maximise the benefits of this new tax incentive.
*This material is provided for informational purposes only, and is not intended to be, and should not be relied on for, tax or accounting advice. You should consult your own tax and accounting advisers before engaging in any transaction.