Since 22 May 2025, New Zealand businesses can claim an immediate 20% tax deduction on the cost of new business assets, and that includes new commercial and industrial buildings. It’s called Investment Boost. For a business planning a new warehouse, workshop or factory, it’s worth understanding before you set your budget.
This post explains the scheme in general terms. It isn’t tax advice, so talk to your accountant about your situation.
How it works #
In the income year a new asset is first available for use, you can deduct 20% of its cost up front, on top of the usual depreciation rules. There is no cap on the value of the investment. Inland Revenue’s guidance is on its Investment Boost pages.
Which buildings qualify #
- Yes: new commercial and industrial buildings, and improvements to existing ones, bought or built and first available for use on or after 22 May 2025.
- No: residential rental buildings, improvements to residential buildings, and second-hand assets already used in New Zealand.
- Ask your accountant: farm buildings and mixed-use buildings, which need specific advice.
Why it matters more for buildings #
Commercial buildings currently have a 0% tax depreciation rate. That means the 20% Investment Boost deduction is, in practice, the main tax deduction available on the building itself, rather than just bringing depreciation forward. Depreciation recovery rules can still apply if you later sell the building for more than its tax book value.
A simple illustration #
Say a company builds a new warehouse that costs $500,000.
- Investment Boost deduction: 20% of $500,000 = $100,000.
- At the 28% company tax rate, that’s up to $28,000 less tax in that income year.
The real numbers depend on your structure, GST position and what counts as part of the building, which is why the accountant conversation matters.
Timing: the “available for use” date #
The deduction falls in the income year the building is first available for use, not when you sign the contract or pay the deposit. Inland Revenue’s own examples show a building isn’t available for use until it can legally be occupied, typically when the code compliance certificate is issued. If your balance date is close, the completion date can move the deduction from one year to the next.
How Steelspan can help #
- We give you a clear cost breakdown your accountant can work from.
- We give you a realistic programme, so you can plan which tax year the building lands in.
- Our process takes you from budget estimate to firm price before you commit to construction.
We can also split building costs from plant and fit-out costs on our invoices, so your accountant can see exactly what’s what.
Talk to Steelspan #
Planning a new commercial or industrial building? Send us the basics and we’ll give you a budget estimate you can take to your accountant. Use our Easy Shed Quote or call 0800 787 726.
