If you're a commercial landlord or property investor planning to build new retail or office spaces, the government’s Investment Boost deduction could reward you with a 20% upfront tax deduction. It’s part of a broader initiative to encourage business investment and applies from 22 May 2025 onwards.
The Investment Boost is a one-off 20% deduction on the cost of qualifying new assets—on top of standard depreciation. It’s designed to support businesses that are investing in new infrastructure, plant, or property. If your build qualifies, you can significantly reduce your tax bill in the same year the asset becomes available for use.
See also: Investment Boost - What you need to know
In this case, your development qualifies as a “new investment asset,” and you can claim a 20% tax deduction on construction costs in the year depreciation begins—likely the year ending 31 March 2027.
To claim the Investment Boost:
Yes, commercial buildings with a 0% depreciation rate are still eligible.
This deduction allows you to improve cash flow and increase return on investment by reducing taxable income earlier. With rising development costs and tight margins, incentives like this can significantly impact your bottom line.
To qualify, your project must be available for use on or after 22 May 2025. If it’s completed and in use before that date, the deduction is not available. If you're planning construction over the next 12–24 months, now is the time to review your timing strategy.
The Investment Boost is a valuable incentive for commercial developers and property investors who plan ahead. If you're considering a new build, structuring your project correctly could unlock meaningful tax benefits in the first year of use.
We work with property investors and business owners to help them identify and access the tax incentives they’re entitled to. Let’s talk about how you can benefit from the Investment Boost and make your next development even more profitable.
For full legislative details, visit New Zealand Inland Revenue: Tax Policy.