Does building new shops qualify for the Investment Boost?
- Nairn Fisher
- Sep 10
- 2 min read
Updated: Sep 25
The question: A New Zealand company that leases out commercial properties wants to build new retail shops on land it already owns. Once construction is finished in May 2026, the shops will be rented out to tenants and generate rental income. The big question is: does the money spent on construction qualify for the 20% Investment Boost deduction?
The answer: Yes – it does! The new shops are considered “new investment assets” under the Investment Boost rules. This means the company can claim a 20% deduction on the cost of constructing the shops.
How it works:
The Investment Boost allows businesses to claim a 20% deduction on qualifying “new investment assets” in the first year they can start depreciating the asset.
Qualifying assets include most types of commercial buildings (even those with a 0% depreciation rate), as long as they are new and haven’t been used in New Zealand before (other than as trading stock).
Dwellings (residential houses) and certain intangible assets don’t qualify.
Timing matters:
For depreciable assets like commercial buildings, the key date is 22 May 2025. The asset must become available for use in New Zealand on or after this date.
Since the shops will be completed in May 2026, they meet this condition.
The company will be able to claim the 20% Investment Boost deduction in the income year ending 31 March 2027.
In short: Because the new shops qualify as “new investment assets” and will be completed after 22 May 2025, the company can take advantage of the 20% Investment Boost deduction on the construction costs.
Further reading:
This article offers general insight and may not reflect your unique circumstances. We recommend conducting your own due diligence and seeking professional guidance for advice. Feel free to get in touch if you require assistance.