How to Claim Equipment in New Zealand (2026 Guide)

Quick answer

Equipment in New Zealand is deducted through depreciation using Inland Revenue’s published rates, either diminishing value or straight line, at the business-use percentage. Items costing $1,000 or less (GST exclusive for registered businesses) are written off immediately under the low-value asset rule. There is no broader instant write-off. On sale, the difference between price and tax book value is taxable recovery or a deductible loss. GST is claimable as input tax.

Is equipment tax deductible in New Zealand?

Yes, over time. Equipment is a capital asset, so the cost is not deducted when you pay it. Instead you claim depreciation each year, using the general rates Inland Revenue publishes in IR265, most recently reissued in March 2026. Each asset class carries two rates: a diminishing value rate applied to the remaining adjusted tax value, and a straight line rate applied to cost. You choose one per asset, can move from diminishing value to straight line, and apply the rate to the business-use proportion. The first year is apportioned by the number of months you owned the asset.

There are two shortcuts. Since 17 March 2021 an asset costing $1,000 or less can be deducted in full in the year of purchase ^[1] . And from 22 May 2025, Investment Boost lets a business deduct 20% of the cost of a new, or new-to-New Zealand, depreciable asset when it’s first available for use, then depreciate the remaining 80%; there’s no value limit, but second-hand assets already used in New Zealand don’t qualify ^{[2] [3]} . GST-registered businesses measure the $1,000 excluding GST. The rule does not apply where several assets with the same rate are bought together from one supplier and together exceed $1,000. Assets that qualify can alternatively be pooled and depreciated as a single balance at the lowest rate in the pool, which is useful for a volume of small items.

New Zealand has nothing like Australia’s $20,000 instant write-off or the UK’s Annual Investment Allowance. A $15,000 machine is depreciated at its class rate however small the business, and buildings have had a 0% depreciation rate since the 2024-25 income year. Commercial fit-out that is separately identifiable is still depreciable at its own rates.

Disposals close the loop. If you sell equipment for more than its adjusted tax value, the gain up to original cost is depreciation recovered and is income in the year of sale. If you sell for less, the loss is deductible. Writing an asset off as scrapped is a disposal for nil proceeds.

How much can you claim?

Worked example: a Dunedin print shop buys a $48,000 digital press (GST exclusive) on 1 July 2026, in a class rated at 20% diminishing value, plus a $950 guillotine and $3,200 of shelving at 10% diminishing value. The guillotine is a low-value asset and is deducted in full, $950. The new press and shelving qualify for Investment Boost: $9,600 and $640 deducted upfront. Depreciation then runs on the remaining 80%: the press earns 20% of $38,400 for the nine months owned in a 31 March year, $5,760, and the shelving 10% of $2,560 for nine months, $192. First-year deductions total $17,142, worth about $4,800 at the 28% company rate, and input tax of $7,822 is claimed on the GST return.

Private use restricts every figure. Equipment bought on hire purchase is depreciated from the start with the interest deducted separately. Vehicles follow the same depreciation mechanics but carry their own logbook and FBT rules.

GST on equipment

A GST-registered business claims the 15% GST on equipment as input tax at the business-use percentage, and depreciates the GST-exclusive cost. Taxable supply information for a purchase over $1,000 must include the buyer’s name and address alongside the supplier’s GST number and the GST amount. Imported equipment is charged GST by Customs at the border, claimable on the same basis once paid. Second-hand equipment from an unregistered seller can attract the secondhand goods credit. The New Zealand GST guide covers each case.

Record-keeping requirements

Keep a fixed asset register with each asset’s description, supplier, purchase date, GST-exclusive cost, depreciation class and rate, method, business-use percentage, accumulated depreciation, and disposal date and proceeds. The register is what produces the depreciation recovered or loss figure on sale. Keep invoices and the register for seven years after the last entry relating to the asset. The New Zealand record-keeping guide covers electronic records.

How to claim, step by step

1. Record the GST-exclusive cost and purchase date, and apply the $1,000 low-value test, including the same-supplier bundle rule.
2. Deduct low-value assets in full or add them to a pool.
3. Find the class rate for everything else in IR265 or the rate finder and choose diminishing value or straight line.
4. Calculate the first year pro-rata by months, at the business-use percentage, and enter it in the IR10 and the return.
5. Claim input tax on the GST return with taxable supply information that meets the over-$1,000 requirements.
6. On sale or scrapping, calculate depreciation recovered or loss from the register.

Common mistakes

• Expecting an instant write-off above $1,000; New Zealand has none for general equipment.
• Measuring the $1,000 threshold on the GST-inclusive price when registered.
• Claiming a full year of depreciation on an asset bought in the last quarter.
• Forgetting depreciation recovered on sale, which Inland Revenue cross-checks against the register.
• Depreciating a building rather than only its separately identified fit-out.

Software that helps

• Dext captures supplier invoices for equipment so cost and date are evidenced before the ledger entry.
• ExpenseFlow reads equipment invoices with frontier vision AI, codes each line to an expense or fixed asset account using the $1,000 low-value asset threshold, explains the call under the line, lowers its confidence so a reviewer decides when the invoice does not settle it, and syncs the approved bill to Xero with the document attached, or to QuickBooks Online as a coded bill.
• Xero and MYOB both run fixed asset registers that apply IR265 rates and calculate disposal gains and losses.

FAQ

See the answered questions above for the low-value rule, choosing a rate, DV versus SL, disposals, and GST.