Investment Boost
What do we know?
Investment Boost is a new tax deduction option available to New Zealand businesses that meet the below criteria of business portion of capital purchases from 22 May 2025. It allows businesses to deduct 20% of the costs in the year of purchase and also claim standard depreciation on the remaining 80%.
Eligible Assets –
- Most depreciable assets (e.g., machinery, equipment, work vehicles)
- New commercial and industrial buildings (normally not depreciable)
- New capital improvements to eligible assets
- Certain non-depreciable property with depreciation-like deductions (e.g., improvements to farmland, horticulture, aquaculture, forestry, petroleum, and mineral development)
Ineligible Assets
- Previously used assets in New Zealand (Imported assets eligible if not previously used in NZ)
- Land
- Trading stock
- Residential buildings (except hotels, hospitals, rest homes)
- Fixed-life intangible assets (e.g. patents)
- Fully expensed assets under other rules
We will provide further updates as additional information becomes available.
KiwiSaver
Contribution Changes
The default contribution rate for both employees and employers will increase from 3% to 4%, phased in as follows:
- 3.5% from 1 April 2026
- 4% from 1 April 2028
Employees will have the option to temporarily remain at the 3% rate if needed. Further details as to how this will be done will be provided closer to 31 March 2026.
Eligibility Extensions
- From 1 July 2025, 16 and 17 year olds will be eligible for the government contribution
- From 1 April 2026, employers will begin matching contributions for this age group
Government Contribution Adjustments
- From 1 July 2025, the government contribution will be halved to 25 cents per dollar contributed, up to a maximum of $260.72 annually
- The current year’s contribution remains unchanged and will be paid in July/August 2025
- Individuals earning over $180,000 will no longer receive the government contribution from 1 July 2025
Other Key Changes
Rates Rebates
- The income threshold for SuperGold cardholders will increase from $31,510 to $45,000 from 1 July 2025
Working for Families
- From 1 April 2026, the family income threshold will rise from $42,700 to $44,900. However, once income exceeds that threshold, payments reduce by a set percentage—currently 27%, increasing to 27.5% from 1 April 2026.
Best Start Tax Credit
- From 1 April 2026, the first year of the Best Start tax credit will be income-tested, aligning with the second and third years. For those children born before 1 April 2026 there are no changes to the current scheme.
Inland Revenue
- Inland revenue has an additional $35 million announced for tax compliance and collection activities. This money is expected to generate an additional $280 million in tax revenue.
Future Changes
- Reforms are planned for the Fringe Benefit Tax (FBT) to simplify the rules and reduce compliance costs. Additionally, changes to the Employee Share Scheme are expected to address issues related to the timing of taxation.
If you wish to discuss any of the changes, feel free to contact us, Rodgers & Co Ltd, your trusted Christchurch Accountants.
