The 2025 Budget shows the government is focused on boosting growth and investment, while trying to offer incentives without overspending. Some of the key

announcement’s businesses should be taking note of are: 

Investment Boost – A New Tax Incentive

A new 20% immediate deduction for the cost of new assets purchased. This is an accelerated depreciation claim which provides a new tax incentive for purchasing new assets. 

Note Investment Boost will not cover: 

• Assets that have previously been used in New Zealand (so no 20% deduction will be available for existing assets, including buildings) 
• Land 
• Trading stock 
• Residential buildings (dwellings) 
• Fixed-life intangible assets (such as patents) 
• Assets that are fully expensed under other rules 

What Assets Are Eligible?

Investment Boost will be available on all eligible assets with no limit on value. This includes new commercial and industrial buildings.
Assets that were under construction on 22 May 2025 (but are not yet used, or which would be available for use for the first time after 22 May 2025) will also be eligible.

Eligible assets include:

• Improvements to farmland
• Planting of listed horticultural plants
• Improvements to aquacultural businesses
• Improvements to forestry land

Why It Matters

The Investment Boost is encouraging for businesses looking to invest, especially those acquiring long-life assets with lower depreciation rates.
It’s a focused effort to help stimulate capital spending and lift productivity, which has been weak in recent years.

This provides a good opportunity for businesses to review their assets and consider for their investment decisions going forward.
This should also provide some tax relief and help with new commercial developments happening in our region.

KiwiSaver Changes

There have been tweaks to KiwiSaver, which will impact both employees and employers.

Contribution Rate Increases

• The default rate for employee and employer contributions will increase over the next few years:
• 3.5% from 1 April 2026
• 4% from 1 April 2028

Reduced Government Contribution

• From 1 July 2025, the annual government contribution will be halved:
• From 50 cents per dollar contributed (max $521.43)
  
• To 25 cents per dollar contributed (max $260.72)
• This will only be available to employees earning less than $180,000 per annum

Extension to Younger Members

• This will only be available to employees earning less than $180,000 per annum
• From 1 July 2025 for government contributions
• From 1 April 2026 for employer matching

Other Announcements That May Impact Businesses

Elevate Venture Capital Fund

• An extra $100 million committed to the Elevate venture capital fund to help high-growth technology companies.
  

Employee Share Scheme Changes

• Changes to the tax rules for employee share schemes.
• Further details are expected to be released.
• New rules suggest deferring the current taxing point (when the shares are earned).

FBT Rule Simplification

• Changes to simplify the FBT rules.
• More detail is expected once feedback is considered.
  

IRD Compliance Funding Boost

• An additional $35 million in Inland Revenue funding for compliance and collection activities.
• The government is also continuing $26.5 million a year in funding from the 2022 Budget, which was due to stop in June.
• This suggests risk reviews and IRD audits should continue to increase as the government takes a more targeted approach.

Need help reviewing your asset planning or understanding KiwiSaver changes? Contact your adviser today for tailored guidance.

Matt Washer is an Associate with Baker Tilly. He works with clients across different industries and stages of business growth, and has developed expertise in a variety of areas.