Investment Boost: What It Means for Rural Businesses

If you’re planning to upgrade a vehicle, invest in new equipment, or modernise your operation this year, the government's new Investment Boost could make the numbers stack up — especially for rural businesses investing in productivity.

What is the Investment Boost?

If a new capital asset becomes available for use in New Zealand on or after 22 May 2025, you can claim a 20% accelerated deduction in the same year. You’ll still claim regular depreciation, just from the reduced value.

This applies to things like:

  • Utes and work vehicles (business use portion) 
  • Machinery and equipment
  • Irrigation systems and land improvements 
  • Commercial Buildings  (even if they would not usually be depreciable)

But not:

  • Land
  • Residential buildings
  • Trading stock
  • Second-hand or previously used assets in NZ

Example: a new $65,000 ute

Let’s say you purchase a brand new ute for $65,000 + GST in August 2025, and it’s used exclusively for business.

Here's how the numbers work:

  • Step 1: Investment Boost deduction
    20% × $65,000 = $13,000 (claimed in your 2026 tax return)
  • Step 2: Adjust cost for depreciation
    $65,000 − $13,000 = $52,000
  • Step 3: First-year depreciation
    Assuming 6 months use in the 2025–26 income year, and a 30% depreciation rate:
    30% × 6/12 × $52,000 = $7,800

Total deductions in year one:
$13,000 (boost) + $7,500 (depreciation) = $20,500
At 28% tax, that’s a tax saving of $3,640. 

Not bad if you were planning the upgrade anyway.

What to watch out for

  • If you sell the vehicle later for more than its book value, you may need to pay back part of the tax benefit as depreciation recovered.
  • If the vehicle is partly private use, only the business-use portion qualifies.
  • Assets must be new and unused in NZ — including imported but never-used vehicles or equipment.
  • The key timing is when the asset is available for use, not just when you purchase it.

Why this matters for rural businesses

This is a rare opportunity to get immediate tax relief for investing in your operation. It rewards forward-thinking businesses that are upgrading gear, reducing risk, and improving output.

Our advice?

If you're already eyeing up a vehicle, piece of equipment, or major farm upgrade — let’s talk before you commit.

We can help you:

  • Confirm if it qualifies
  • Time the purchase for maximum tax impact
  • Plan for depreciation and cash flow
  • Avoid mistakes with partial use or GST

 

Thinking about a purchase?

Let’s run the numbers together.

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