Businesses across New Zealand are exploring how to take advantage of the Investment Boost announced in Budget 2025. If you’re planning for growth, scaling operations, or increasing warehouse capacity, this new incentive could make the investment more accessible and strategic.
Disclaimer: The following is an overview of the investment boost and should be used in addition to professional financial advice.
What is the Investment Boost?
The Investment Boost is a new tax policy aimed at improving productivity across New Zealand business. It allows businesses to claim a 20% upfront deduction on the cost of eligible new assets, in addition to standard depreciation.
What qualifies:
- Machinery and equipment
- Work vehicles
- Commercial and industrial buildings
- Imported second-hand assets (if new to NZ)
What doesn’t:
- Land and residential buildings
- Trading stock
- Fixed-life intangibles (e.g. patents)
- Previously used NZ-based assets
There’s no cap on the investment amount, which means the 20% deduction applies whether you’re spending $50,000 or $5 million.
What This Could Mean for Your Project
If you were considering a $100,000 racking investment, here’s how it now plays out:
- $20,000 upfront tax deduction in year one
- Remaining $80,000 depreciated as usual
- Lower taxable income, improved short-term cash flow
- Greater ability to invest in long-term efficiency gains
These changes may also improve the ROI on projects that were already under review, including storage upgrades, new site builds, or capacity increases.
In the example above, assuming a standard rate of depreciation 10% per year over 10 years, and a 28% tax rate, here is how the ROI changes:
Previously:
- Year 1 Depreciation: $10,000
- Tax Impact: –$2,800
With the Investment Boost:
- Year 1 Depreciation: $30,000
- Tax Impact: –$8,400
After tax, you now have an additional $5600 in cash that can be invested elsewhere in the business, and you will also be able to enjoy the benefits of the investment earlier than expected.
Why Warehouse Fit-Outs Are Well Positioned
The tax benefits are only part of the picture. For warehouse projects, there are strategic reasons to act now:
- Space efficiency pays off over time. Investing in the right system now can delay the need for a larger facility later.
- Delays can cost more in the long run. With rising material costs and lead times, early investment may offer better value.
- Productivity gains compound. A more efficient layout reduces picking times, lowers forklift traffic, and improves staff safety, all of which support your bottom line.
Planning a New Warehouse?
The incentive also applies to new commercial buildings. That means warehouse construction, extensions, or structural reconfigurations could also qualify, creating an opportunity to build smarter now, with tax support on your side.
Government projections suggest the Investment Boost could lift GDP by 1% and wages by 1.5% over the next two decades, with half of that growth expected within the first five years.
Make the Most of the Govt Budget 2025 in Your Warehouse
The 2025 Budget opens a timely opportunity for strategic warehouse investment, but only if you have the right plan in place.
Whether you’re upgrading your current layout, planning a new build, or scaling to meet demand, our team is here to support you from start to finish. We’ll assess your space, help you navigate consent requirements, and deliver a fit-for-purpose solution that’s built to last.
We’ll take care of the details, so you can stay focused on growing your business.
Talk to one of our experts to check your eligibility and explore the best approach for your next warehouse project.
