As part of Budget 2025, the Minister for Finance, Nicola Willis, introduced Investment Boost– a new way for Kiwi businesses to reduce the cost of investing in new assets and equipment.

Investment Boost is expected to lift NZ GDP by 1% and wages by 1.5% over the next twenty years, with half these gains in the next five years.

Let’s look at the benefits of the scheme and how it could help your small business.

What does Investment Boost offer?

Investment Boost is a new tax deduction that’s available to all Kiwi businesses, whatever the size of your business or your business type.

From 22 May 2025, you can claim 20% of the cost of new assets as an expense, then claim depreciation as usual on the remaining 80%.

What can you claim?

To claim Investment Boost, the asset you purchase must be:

• New or new to New Zealand
• Available for the business to use on or after 22 May 2025, and
• Depreciable for tax purposes.

You can also claim for:

• new commercial and industrial buildings
• improvements to depreciable property (but not residential buildings)
• primary sector land improvements
• assets arising from petroleum development expenditure and mineral mining development
• expenditure incurred on or after 22 May 2025 (except rights, permits or privileges)

What can you NOT claim?

There are some limitations on which assets you claim for under the Investment Boost scheme.

You cannot claim for:

• second-hand assets that are sourced from New Zealand
• residential rental buildings
• most fixed-life intangible assets (such as patents)

How can you make a claim?

You can claim the Investment Boost in your income tax return for the financial year in which you purchase a new eligible asset.

For instance, if you buy a new asset on May 23, 2025, include the Investment Boost amounts in your 2026 income tax return (which covers the financial year ending March 31, 2026).

How to maximise this tax incentive

So, that’s the lowdown on how the Investment Boost scheme works. But how can you use this tax incentive to make a tangible difference for your small business?

Here are five ideas to get you started.

1. Invest in technology and AI to boost your productivity:

Use the 20% tax deduction to buy new machinery, software (including AI tools) and equipment. This direct cashflow benefit makes modernising your operations more affordable and, with new, cutting-edge equipment and tech, you can give yourself a real competitive edge.

2. Increase wages and attract new talent:

By investing in new assets that boost productivity, your business can generate more revenue and improve profitability. This financial uplift helps you offer competitive wages and benefits, making your business a more attractive employer in the currently tight labour market.

3. Upgrade and future-proof your business:

In an unstable economic climate, the Investment Boost encourages proactive investment. By replacing aging equipment, upgrading commercial buildings, or investing in new infrastructure you’re better prepared to weather the economic ups and downs that lie ahead.

4. Investment in sustainable assets to assist with climate change threats:

Use the tax savings from the Investment Boost to invest in environmentally friendly assets. This could include purchasing electric vehicles for your fleet, installing energy-efficient machinery, or investing in renewable energy solutions for your premises.

5. Reinvest in growth and new revenue streams:

The lower tax bill from the Investment Boost frees up more capital. Reinvest these savings into areas that fuel growth. This could include expanding your product lines, entering new markets, increasing marketing efforts, or providing advanced training for your team.

Talk to us about making the most of Investment Boost

If you’re looking to invest in new assets and equipment, Investment Boost has come along at exactly the right time. Come and talk to the team about maximising this tax incentive.

A business mentor can provide guidance and support, so you make the right decisions and stay focused on the end goal as a business owner. They can also help you move forward in your career by providing advice and feedback on what steps to take to reach the pinnacle of success.

But have you ever thought of your accountant as a mentor?

Why your accountant is the ideal mentor

Having someone who understands your business journey is incredibly important. You might see an accountant as someone who files your tax returns. But, in fact, we’re experienced business owners, with access to a significant network of other business professionals.

An accountant can be the mentor you didn’t know you needed. No-one knows your business better than us, so we’re perfectly placed to offer you advice, guide your business journey and help you push your skills and capabilities as a business owner.

As a mentor, an accountant will:

Expand your knowledge as an entrepreneur – as business owners, we have the knowledge and experience to help you move your business forward. And we can work with you to expand your leadership skills, business thinking and entrepreneurial ideas.

• Be a shoulder to lean on – we’ll offer 1-2-1 mentoring sessions where we can listen to your unique worries and concerns as a business owner. Having someone on the same page to listen and empathise is vital for your business and your own mental health.
• Guide the important elements of your business – we’ll help you manage and improve your business strategy, planning and decision-making skills. We’ll also provide the management information systems you need to guide your finances and planning.
• Keep your finances on track – we’ll show you how to maximise profits, reduce costs, and make better financial decisions. We’ll also help you plan your own personal wealth and tax strategies, so you can achieve your own entrepreneurial goals and lifestyle.
• Introduce you to a broader business network – we work with hundreds of other business owners across a range of industries. This means we can link you up with other entrepreneurs and founders, so you have a network of other like-minded individuals to connect with. This can be vital when brainstorming and benchmarking, or if you need to talk to someone who understands the specific pain points you’re experiencing.

Having someone to guide your business journey can be invaluable. A business owner must grow and evolve along with their business, and having regular mentoring catch-ups is the ideal way to progress, offload your concerns and look for new inspiration.

If you want to grow as an entrepreneur, please come and talk to us about our mentoring services and how we can guide your business future.