The budget, announced on 22 May 2025, includes a 20% “investment boost” tax deduction for business assets and changes to KiwiSaver.
New Zealand’s Minister of Finance, Nicola Willis, announced the 2025 budget on 22 May 2025, introducing “investment boost” tax deduction for business assets and adjustments to KiwiSaver settings.
Investment boost
Investment boost is a new tax incentive that will increase capital investment in New Zealand. It aims to encourage business investment that lifts wages and grows the economy. The Investment Boost enables businesses to instantly deduct an additional 20% of the cost of a new asset from their taxable income, in addition to standard depreciation benefits.
The Investment Boost applies to new assets purchased in New Zealand as well as new and used assets imported from overseas. It includes commercial buildings but excludes land, residential buildings, and assets already in use in New Zealand.
The Investment Boost takes effect on 22 May 2025.
Changes to KiwiSaver
The 2025 budget changes the KiwiSaver programme to support Kiwis in saving more for their first home and retirement and make the scheme more fiscally sustainable.
The default rate of employee and employer contributions for KiwiSaver will rise from 3% of salary and wages to 4% in two steps. The rate will increase to 3.5% from 1 April 2026 and to 4% from 1 April 2028.
The increases are being phased in over three years.
Other tax policy changes include:
- Scrapping the digital services tax;
- Adjusting interest deductibility for nonresidents;
- Attracting foreign investment through Invest New Zealand;
- Adjusting international tax rules to support infrastructure investment.
- Simplifying employee share scheme taxes to help Kiwi startups compete for talent.
