Investment Boost calculator: What the 20 percent deduction is worth to your business
The short answer
Investment Boost lets a business deduct 20 percent of a new asset's cost in the year it is first available for use, then depreciate the rest as normal. For a company at 28 percent that deduction is worth 5.6 percent of the cost in tax; net of the year-one depreciation it replaces, solar gains about 4.7 to 5.5 percent.
Calculator
Work it out for your asset
The asset
What it is worth
$8,400
Tax saved by the 20% deduction of $30,000, at 28%: about 5.6% of the cost. A deduction, not a discount.
- Year-one deductions with the Boost
- $49,200
- Year-one depreciation without it
- $24,000
- Extra deductions brought into year one
- $25,200
- Extra tax cash in year one
- $7,056
Over the asset’s life you deduct the same total either way: the Boost brings deductions forward, which is a cash-flow benefit rather than extra deductions, and selling the asset above its tax value claws it back as depreciation recovery. Indicative, not tax advice; confirm with your accountant.
The rules
How Investment Boost works
- The deduction
- 20 percent of the asset's cost (ex GST if you are GST-registered, installation included) in the income year it is first available for use. The remaining 80 percent depreciates at the normal rate from the same year.
- From when
- Assets first available for use on or after 22 May 2025. Availability, not purchase, is the test.
- What qualifies
- New depreciable assets and improvements to them, assets new to New Zealand (imported second-hand equipment counts), new commercial and industrial buildings, and farm, horticultural and aquaculture land improvements.
- What does not
- Dwellings, land, trading stock, fixed-life intangibles such as patents, assets previously used in New Zealand, and low-value assets you expense outright.
- Who
- Any business taxpayer: companies, trusts, partnerships, sole traders and Māori authorities. The cash value depends on your tax rate.
- Your choice
- Optional, asset by asset: the full 20 percent or nothing. Claim it and the asset must be depreciated.
- If you sell
- Selling above tax book value claws the Boost back as depreciation recovery income, like any other depreciation.
Sources: Inland Revenue’s Investment Boost guidance and its commentary on the Taxation (Budget Measures) Act 2025; IRD general depreciation rates (IR265, March 2026); IRD tax rates. Checked 2 October 2026. Not tax advice; confirm your position with your accountant.
Worked example
Investment Boost on commercial solar
A 100 kW commercial solar system costs about $160,000 installed, the middle of our calculator’s band. Investment Boost deducts $32,000 in the year it is commissioned, which saves a company $8,960 of tax: 5.6 percent of the cost.
Solar depreciates at 16 percent diminishing value, so without the Boost you would have deducted $25,600 in a full first year anyway. Net of that, the Boost adds $7,526 of tax cash in year one (4.7 percent), or $8,841 (5.5 percent) if the system is commissioned in the last month of your income year.
That is real money, paid when the project costs the most, but it is not a discount. How it fits with the loan and the power saving is in Investment Boost on solar, and what a system would do for your bill is one click away in the solar calculator.
Straight answers
Investment Boost questions
When did Investment Boost start?
It applies to new assets first available for use on or after 22 May 2025. The test is when the asset can first be used, not when you bought it: an asset ordered before 22 May 2025 qualifies if it was first available for use on or after that date, while one already in use before it does not.
Does Investment Boost have an end date?
No end date is written into the law. The general election is on 7 November 2026, and Labour has proposed replacing Investment Boost with a smaller instant write-off from 1 July 2027, with transition rules still to be set. We will update this page if the rules change.
How does Investment Boost work?
In the income year a new asset is first available for use, you deduct 20 percent of its cost immediately, then depreciate the remaining 80 percent at the asset's normal rate from that same year. Your total deductions over the asset's life do not change; the Boost brings them forward, which lowers your tax sooner.
Is Investment Boost a 20 percent discount?
No. It is a tax deduction, so its cash value depends on your tax rate: 5.6 percent of the cost for a company at 28 percent, 7.8 percent for a trust or individual at 39 percent, and 3.5 percent for a Māori authority. Anyone describing it as 20 percent off is overstating it several times.
Who can claim Investment Boost?
Any taxpayer with depreciable business assets: companies, trusts, partnerships (each partner claims their share), sole traders and Māori authorities. Mixed-use assets qualify for the business share only. There is no value cap and no limit on the number of assets.
Do I have to claim Investment Boost?
No. It is optional and chosen asset by asset: you claim it by including the deduction in that year's return, or leave it out and depreciate the full cost as normal. It is the full 20 percent or nothing for each asset, and if you claim it the asset must be depreciated.
What happens to Investment Boost if I sell the asset?
Investment Boost is treated like extra depreciation. Sell the asset for more than its tax book value and the difference, up to the total deductions you have claimed including the Boost, is taxed as depreciation recovery income. Farm land improvements are the exception and are not clawed back.
How do I claim Investment Boost in my tax return?
Include it in the return for the income year the asset is first available for use; no separate notice to Inland Revenue is needed. On the IR10 it is reported with depreciation, and from the 2026 income year there is also a box for the total value of Investment Boost assets. Keep invoices, proof of payment and compliance certificates. Your accountant will handle the detail.
Planning solar? See the whole case.
The solar calculator puts Investment Boost next to the system cost, the power saving and the finance, at conservative, disclosed assumptions.