Can I Claim Investment Boost Tax Write-Off for Used Vans in New Zealand?
Can I Claim Investment Boost Tax Write-Off for Used Vans in New Zealand?
If you’re a Kiwi business owner considering buying a used van, you might be wondering if you can take advantage of the government’s Investment Boost tax incentives to reduce your tax bill. The Investment Boost was introduced to encourage businesses to invest in new assets - but does it apply to used vans?
Let’s break down what you need to know.
What is the Investment Boost?
The Investment Boost is a temporary tax incentive introduced by the NZ government to help businesses offset the cost of buying new assets. Under the scheme, businesses can claim an immediate 20% tax deduction on the purchase price of qualifying new assets acquired within a set period.
The boost is designed to improve cash flow by accelerating depreciation deductions.
Can You Claim Investment Boost for Used Vans?
The Investment Boost only applies to new and unused assets, or used vehicles which have not previously been used in NZ. Used vans that have been on the road in NZ, no matter how good the condition, do not qualify - UNLESS they are fresh imports. Fresh imports are treated the same as new cars for tax purposes — meaning you can claim 20% of the purchase price as a deduction off your taxable income in the first year.
This means if you buy an already registered and used van - even if it’s brand new to your business—you can’t claim the 20% upfront deduction under the Investment Boost.
What About Regular Depreciation?
While used vans don’t qualify for the Investment Boost, as we said above, fresh imports DO quality. You can also claim regular depreciation on your used vehicle. In NZ, vans used for business purposes typically depreciate at a rate of about 30% diminishing value per year (subject to specific Inland Revenue rules).
This means you can gradually reduce your taxable income by writing off a portion of the van’s value each year over its useful life.
Other Tax Considerations When Buying a Van
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GST: If your business is GST-registered, you can usually claim back the GST portion of the van purchase price (if bought from a GST-registered supplier).
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Operating costs: Expenses like fuel, maintenance, insurance, and registration related to business use are generally tax deductible.
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Personal vs business use: You must keep records to show the percentage of business use for accurate claims.
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Fresh NZ new imports are treated just like new vehicles when it comes to tax benefits — allowing you to deduct 20% of the purchase price from your taxable income in the first year. It’s a smart option for those looking to maximise both value and savings.
More info on the investment boost can be found on the IRD website:
Final Thoughts from City Motor Group
While used vans don’t qualify for the Investment Boost tax write-off, fresh imports are treated like new vehicles when it comes to tax benefits. So buying a quality used van remains a smart, cost-effective option for many Kiwi businesses.
At City Motor Group, we offer a wide range of reliable used vans perfect for work or trade. Plus, our team can help guide you on how to maximise your tax deductions when purchasing a van.
If you want to learn more about buying vans or how tax works with business vehicles, get in touch with your accountant or come see us at City Motor Group in Penrose, Auckland.
City Motor Group – Quality Used Vans You Can Trust
www.citymotorgroup.co.nz