The New Zealand Government’s 2025 Budget introduces a significant incentive for businesses investing in new capital assets, including vehicles. As part of the newly announced Investment Boost, business owners are now eligible for an immediate 20% tax deduction on qualifying new asset purchases, effective from 22 May 2025.
This measure is designed to support business growth, improve cash flow, and encourage investment in productivity-enhancing equipment — including new business vehicles.
The Investment Boost is a tax initiative that allows businesses to:
Deduct 20% of the cost of a new eligible asset in the same financial year it is acquired. This deduction only applies to the portion of the asset used for business purposes.
Continue claiming standard depreciation on the remaining value of the asset in subsequent years.
According to the official government release:
“Businesses can deduct 20% of the value of new assets in the year they purchase them.”
– NZ Government, Budget 2025 Factsheet
This results in a front-loaded tax benefit, improving immediate cash flow and making the case for capital investment significantly more compelling.
Business owners planning to invest in new vehicles can directly benefit from this incentive. Provided the vehicle is new and used primarily for business purposes, it will likely qualify under the scheme.
To qualify, the vehicle must:
Be purchased on or after 22 May 2025
Be a new asset, not previously used or registered
Be used primarily for business purposes
Certain assets are not eligible under this scheme, including:
Second-hand vehicles purchased within New Zealand
Leased vehicles
Passenger vehicles used primarily for personal purposes
This initiative offers a valuable opportunity for businesses to invest in new vehicles while taking advantage of immediate tax relief. In a high-cost, supply-constrained environment, this measure not only incentivises timely purchasing decisions but also provides meaningful financial relief at the point of acquisition.
We encourage all business owners to consult their tax advisor to determine how the Investment Boost applies to their specific circumstances.
Learn more here by reading the Govt Investment Boost Factsheet
If you are ready to have a look at vehicles please visit the link below.
