Investment Boost Tax Incentive Scheme
What this means for New Commercial Building Purchases
The May 2025 Budget has introduced a new accelerated depreciation scheme called the "Investment Boost." Under this scheme, most assets that are depreciable for tax purposes, as well as new commercial and industrial buildings, will qualify. This scheme allows for an immediate deduction of 20% of the cost of any new commercial building (excluding land) that is purchased or available for use from 22 May 2025. The remaining 80% of the cost of the new commercial building remains ineligible for further depreciation deductions.
Example:
- Building value: $100,000.
- Investment Boost deduction: 20%.
- Tax Rate: 28%.
- ($100x20%)x28%.
- One-off Tax saving of $5,600.
- Effectively, a 5.6% saving on the building.
To see if your project qualifies, please refer to the official IRD guidance or speak to your accountant or financial advisor.
Disclaimer: This information is provided for general guidance only and is not financial or tax advice. Please consult a qualified advisor before making any investment decisions based on this information.