Access the new Investment Boost via Xero

Did you hear about the New Zealand government’s new tax deduction? It’s called Investment Boost, and it’s been introduced to help your business grow with earlier deductions when you buy new assets. 

The 2025 New Zealand Budget delivered on 22 May introduced a new tax deduction for all businesses: 20% of the cost of new investment assets can be claimed immediately as an expense, with standard depreciation applied to the remaining 80%.

Now, Investment Boost is accessible via Xero: you can use Xero’s fixed asset feature to help you claim this government deduction. New assets purchased from 22 May 2025 onwards may be eligible. 

We’re rolling out the update to the fixed asset feature now, and it will become available for all New Zealand Xero partners and customers over the coming weeks.

What is Investment Boost?

When your business buys a new eligible asset, you can immediately claim 20% of its cost as an expense in that year’s tax return. Then, you can claim depreciation as usual on the remaining 80%. 

For example, you buy new equipment that meets the eligibility criteria for NZ$10,000. You can immediately claim a $2,000 deduction (20% of $10,000). You then depreciate the remaining $8,000 over the asset’s useful life. 

Some eligible assets may include machinery, vehicles, new and existing commercial buildings, and other depreciable assets for tax purposes. For the list of what you can and can’t claim, and for more information, visit the Inland Revenue website. 

Note, assets used for both business and private use are also included (the claim is pro-rated, just like other expenses with a private portion). There is no cap on the value of assets you can claim this for.

If you have any questions or need help, reach out to your advisor for support. 

Applying the Investment Boost for fixed assets

In your Xero fixed asset register, select the 20% option in the Investment Boost dropdown box to apply it. It can be applied to any eligible new assets purchased on or from 22 May 2025. 

The new Investment Boost feature will help you: 

• automatically calculate the 20% upfront claim and subsequent depreciation for both straight line and diminishing value methods
• identify Investment Boost deductions from normal depreciation transactions
• calculate Investment Boost in line with private use of an asset 

Investment Boost is all about timing. While you claim the same total depreciation over an asset’s life, this new rule means you get a bigger tax deduction in year one. A bigger deduction means a smaller tax bill, leaving more cash in your business sooner. 

More information and support

You can find out more about how to use the new Investment Boost option for fixed assets in Xero in this Xero Central article. If you have any questions, check in with our Xero Support team.

For more information about Investment Boost and its benefits, visit the Inland Revenue website.