Investment Boost: Smart Policy or Just a Sugar Hit?

The Government’s new Investment Boost scheme is making waves—and for good reason. From 22 May 2025, eligible businesses will be able to claim a 20% tax deduction upfront on new asset purchases. It’s designed to unlock cashflow and encourage reinvestment in tools, tech, and equipment.

But is it a game changer for productivity—or just a temporary boost with long-term questions?

What’s the goal?

The scheme is all about stimulating growth. By rewarding businesses that invest in productive assets—like machinery, vehicles, or commercial tech—the Government hopes to lift business confidence, drive up GDP, and create more jobs and higher wages.

How it works

• You can claim 20% of the cost of eligible depreciable assets in the year of purchase (starting 22 May 2025).

• You’ll still claim normal depreciation over time, but this gives you a front-loaded deduction, improving cashflow when it counts.

• It’s optional—businesses can choose to opt in on an asset-by-asset basis.

More information can be found on the in terms what's in and what's out IRD website

Why this matters for your business

• Cash in your pocket sooner: Lower your tax bill in the year you buy, not years down the line.

• Encourages smart upgrades: Replace old equipment, vehicles, or tech before it breaks down.

• Fuel for future growth: Turn tax savings into reinvestment or a buffer for tough times.

• Works alongside depreciation: You don’t lose out long-term—just get more value up front.

How to make the most of it

• Review your capital plans now—what assets might you need in the next 1–2 years?

• Consider bringing purchases forward to benefit from the deduction.

• Get professional advice to structure purchases and avoid missing out.

• Focus on ROI—spend on assets that add value, not just ones that qualify.

Real life Example

Thinking of upgrading your work vehicle? The new Investment Boost Scheme could make that 2025 Ford Ranger Raptor a smart business move.

Here’s how it stacks up under the new rules:

Purchase Price: $100,000 (incl. GST)

Deposit: $30,000

Financed Amount: $70,000

20% upfront tax deduction on the GST-exclusive price ($86,956), = $17,391 deductible in Year 1.

That’s extra cashflow relief, encouraging smarter, sooner upgrades. Standard depreciation still applies in addition

Key Considerations for Businesses Using the Investment Boost Scheme

1. Eligible Assets Only Ensure the asset you're purchasing qualifies—must be new, depreciable, and used for business purposes. Talk to your accountant for clarity.

2. Timing Matters The 20% deduction only applies to eligible assets purchased from 22 May 2025. Consider bringing forward investment plans to align with this.

3. Cashflow Advantage The upfront tax deduction can ease cashflow pressure—but make sure it fits your broader financial strategy.

4. Don’t Forget Depreciation The Investment Boost sits on top of your regular depreciation, offering a double tax-saving effect in the first year.

5. Financing Options Matter Pairing the tax benefit with smart financing can further reduce upfront strain. Work with us so we can help you model different repayment scenarios.

6. Watch for Disposal Risks If you sell or dispose of the asset too soon, you may need to adjust your tax treatment. Understand the full asset lifecycle impact.

7. Size of Benefit Varies Larger investments offer bigger tax savings—but also come with bigger commitments. Balance opportunity with risk.

How can we help?

We offer tailored finance solutions from a panel of trusted lenders to help you make the most of the Investment Boost scheme. Our team will walk you through the cashflow impact, break down your repayment options, and highlight any future risks—such as asset disposal—so you can move forward with clarity and confidence.

Please note fundr is not a tax adviser. All information shared is general in nature. Ensure to check with your accountant or tax adviser to see how the investment boost relates to your business situation.