Newsletter - May 2025
Last Thursday, Finance Minister Nicola Willis unveiled her 2025 budget. The budget has a welcome emphasis on economic growth with targeted support for business owners. Of particular interest are the Investment Boost and KiwiSaver changes.
Investment Boost
The centre piece of the budget (and main tax change) is the investment boost. This is a tax incentive allowing an immediate 20% tax deduction for the cost of a new asset that are purchased on or after 22 May.
It has a broad application extending from a new ute or tractor, new commercial buildings to improvements to farmland. For example, an improvement such as farm tracks which normally have a 5% deduction per year would qualify for an upfront 20% tax deduction plus the usual 5% per year.
There are of course specific rules and eligibility criteria for the deduction. So, you should contact your Partner or our Tax Team if you are considering any major capital purchases, to ensure you receive the maximum tax benefit.
KiwiSaver Overhaul
The government contribution to KiwiSaver has been reduced to 25 cents per dollar saved, with a cap of $261 annually. The minimum employee and employer contribution rate will rise from 3% to 4% over the next three years. High-income earners (over $180,000) will no longer receive government contributions, while 16- and 17-year-olds will now be eligible. If you have any questions around how this will work under your employment agreements, please contact our HR team.
If you have any questions about the budget and its impact on your business, please contact your Partner.
Mike
Kind regards,
The Polson Higgs Team.
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