Disclaimer: This blog is intended as a general guide and may not cover all specific situations or reflect the latest legislative changes. For personalised advice tailored to your unique circumstances, consult a qualified tax professional.
WIN – Upfront 20% Deduction on Business Asset Purchases
From 22 May 2025, businesses can claim an immediate 20 percent deduction on the cost of most new depreciable business assets. This includes brand new items or assets that are new to New Zealand and have not been used here before. They must be used for taxable business purposes.
Examples of eligible assets include:
Motor vehicles, tools, laptops, mobile phones, office furniture, commercial fit-out, and new commercial or industrial buildings.
This deduction is optional. You can choose to use standard depreciation rules if that suits your business better.
How it works
You can claim 20% of the asset’s cost upfront. Standard depreciation then applies to the remaining 80% of the value. For example:
Example – New ute purchased for $60,000 (GST exclusive)
Before 22 May 2025: Entire amount depreciated at 30% DV = $18,000. Tax saving = $5,040 (at 28%).
On or after 22 May 2025: $12,000 deducted immediately. Remaining $48,000 depreciated at 30% DV = $14,400. Total claim = $26,400. Tax saving = $7,392.
Important: Although the 20% deduction is not technically depreciation, it is treated the same way. If you sell the asset for more than its adjusted tax value, that upfront deduction may be clawed back and taxed as income.
What’s not eligible
This deduction does not apply to:
Second-hand assets previously used in New Zealand, land, trading stock, residential buildings or their chattels, fixed-life intangibles like patents, or low-value assets under $1,000 already expensed.
Other things to know
You can still claim Investment Boost on imported assets that are unused in New Zealand. Partial business use is allowed based on the proportion of business use. Capital improvements to eligible assets also qualify.
LOSS – KiwiSaver Contributions Slashed
From 1 July 2025, the government match on KiwiSaver contributions is being halved.
Previously: 50c per $1 contributed (up to $521.43 annually)
Now: 25c per $1 contributed (up to $260.72 annually)
Anyone earning over $180,000 will no longer receive a government top-up.
Default employee contribution rates will increase from 3% to 3.5% in April 2026, and to 4% in April 2028. However, members can still opt back down to 3%, so it is unlikely these changes will significantly lift savings habits.
LOSS – Best Start No Longer Universal in Year One
Currently, new parents receive $73 per week (totalling $3,796 annually) in Best Start payments, regardless of income.
From 1 April 2026, this will change. The Best Start payment will be income-tested in the first year as well:
• Payments begin to reduce when household income exceeds $79,000
• Payments stop entirely once income exceeds approximately $97,000
Example – Household income of $100,000:
Before 1 April 2026: Full $3,796 received.
On or after 1 April 2026: No payment.
Loss = $3,796.
Families with children born before 1 April 2026 remain eligible for the full year one payment.
LOSS – Student Loan Threshold Frozen
Budget 2025 confirms the student loan repayment threshold will be frozen at $24,128 indefinitely. This threshold typically rises each year to keep pace with inflation.
What this means: As incomes rise, more borrowers will exceed the threshold and pay more toward their loan. This particularly affects low-to-middle income earners over time.