The Government has introduced the Investment Boost initiative as part of Budget 2025.

This new policy allows businesses to claim an immediate 20% tax deduction on the cost of eligible new assets.

To qualify, assets must be new to New Zealand—either brand new or previously unused within the country.

Eligible assets include assets such as commercial and industrial buildings, plant and machinery, equipment, and work vehicles.

This does not apply to residential buildings and fixed-life intangible property (e.g. copyrights, trademarks, or land-use rights).

This incentive applies to qualifying assets purchased on or after 22 May 2025, with deductions claimable in your income tax return for that income year.

E.g. Buy a $80,000 vehicle on 31 March and claim an expense of $16,000 in that year plus normal depreciation.

You may want to plan ahead as I expect a lot of purchases timed for March 2026 which could lead to stock shortages.

The deduction reduces the cost price for calculating depreciation.

For example:

If your business acquires a qualifying asset for $100,000:

• You may immediately deduct $20,000 under the Investment Boost.
• The remaining $80,000 is added to your depreciation schedule and depreciated as normal.

This results in a front-loaded tax benefit, reducing taxable income earlier and improving after-tax cash flow.

KiwiSaver Changes – Contribution Rates and Eligibility Updates

Several key changes to KiwiSaver will affect both employers and employees:

Contribution Rates Increasing:

• From 1 April 2026, the default employer and employee contribution rates will increase from 3% to 3.5%.
• From 1 April 2028, they will rise again to 4%.
• Employees may opt to remain at the 3% rate temporarily from 1 April 2026, with applications open from 1 February 2026.

Expanded Eligibility:

• From 1 July 2025, 16- and 17-year-olds will be eligible for government KiwiSaver contributions.
• From 1 April 2026, employers will be required to contribute for enrolled employees aged 16 or 17.

Full Budget 2025 details are available at: budget.govt.nz

Government Contributions Adjusted:

• From 1 July 2025, the government contribution will reduce from 50 cents to 25 cents per dollar contributed, up to a maximum of $260.72 per year.
• Individuals earning over $180,000 per year will no longer qualify for the government KiwiSaver contribution.

At David Hooper Chartered Accountants, we help local businesses make smart financial decisions—from asset planning to managing KiwiSaver obligations.

Get in touch today at [email protected] or call 09 421 1635.