NZ Depreciation Calculator
Calculate depreciation on business assets. Compare diminishing value vs straight line timing and include Investment Boost when an eligible new asset qualifies.
Key Takeaway
Assets costing $1,000 or less (GST exclusive) can be fully deducted in the year of purchase. For larger assets, compare DV and SL timing and check whether Investment Boost applies.
$1,000
Low-Value Threshold
DV
Higher Early Deductions
SL
Equal Annual Deductions
0%
All Buildings (from 2025)
Generally for a depreciable asset that was new or new to New Zealand and first available for business use on or after 22 May 2025. Second-hand NZ assets and residential rental buildings are excluded.
IRD Depreciation Rates Reference
| Asset | DV Rate | SL Rate | Useful Life |
|---|---|---|---|
| Desktop/Laptop Computer | 50% | 40% | 4 years |
| Office Furniture | 16% | 10.5% | 12.5 years |
| Motor Vehicle (car) | 30% | 21% | 5 years |
| Mobile Phone | 67% | 67% | 3 years |
| Software (purchased) | 50% | 40% | 4 years |
| Photocopier | 40% | 30% | 5 years |
| Building Fit-out | 10% | 7% | 20 years |
Looking for a different asset? Search 100+ IRD asset classes — laptops, utes, heat pumps, coffee machines, scaffolding and more — in the NZ depreciation rate finder.
About Depreciation
Depreciation is a tax deduction that allows businesses to spread the cost of an asset over its useful life. In New Zealand, the IRD sets standard depreciation rates for most asset types. You can choose between two methods:
Diminishing Value (DV): Applies the rate to the remaining book value each year. This gives larger deductions in the early years, which is beneficial for assets that lose value quickly like computers and technology.
Straight Line (SL): Applies a fixed percentage of the original cost each year. This gives equal annual deductions, making it easier to forecast. SL rates are lower than DV rates because they are applied to the full cost, not the declining balance.
You can use different methods for different assets. IRD also allows you to change method at the end of an income year; when you switch, use the asset's adjusted tax value for the next calculation.
Worked Example — DV vs SL on a $6,000 Computer
A computer depreciates at 50% DV or 40% SL. For a $6,000 machine used 100% for business, here is how the first three years compare:
| Year | DV deduction | DV book value | SL deduction | SL book value |
|---|---|---|---|---|
| Year 1 | $3,000 | $3,000 | $2,400 | $3,600 |
| Year 2 | $1,500 | $1,500 | $2,400 | $1,200 |
| Year 3 | $750 | $750 | $1,200 | $0 |
DV front-loads the deduction — $3,000 in year 1 vs $2,400 under SL — which cuts taxable income sooner. SL gives a flat $2,400 every year until the asset is written off. Choose DV for fast-depreciating gear (computers, phones); SL when you want predictable, even deductions.
Frequently asked questions
What is the difference between Diminishing Value (DV) and Straight Line (SL)?
Diminishing Value applies the depreciation rate to the remaining book value each year, giving higher deductions early on that decrease over time. Straight Line deducts a fixed percentage of the original cost each year, giving equal annual deductions. DV front-loads deductions while SL spreads them evenly.
When should I use DV vs SL?
DV usually gives larger deductions early, while SL gives steadier deductions. The total depreciation over the asset's life is the same. IRD allows different methods for different assets and a method change at the end of an income year, using adjusted tax value for the next calculation.
How does Investment Boost affect depreciation?
For an eligible new asset first available for business use on or after 22 May 2025, Investment Boost gives a 20% deduction first. Standard DV or SL depreciation then applies to the remaining 80% of cost. Second-hand NZ assets and residential rental buildings are excluded.
What is the low-value asset threshold?
Assets costing $1,000 or less (GST exclusive) can be fully expensed in the year of purchase. This means you get the entire cost as a tax deduction immediately, without needing to depreciate over multiple years.
Can I claim depreciation on a vehicle?
Yes. Motor vehicles depreciate at 30% DV or 21% SL per year. If the vehicle is used partly for private purposes, you can only claim the business-use portion. Keep a logbook for at least 90 days to establish your business use percentage.
Can I claim depreciation on buildings?
No. All buildings with an estimated useful life of 50 years or more have a 0% depreciation rate from the 2025 income year — Budget 2024 removed the commercial and industrial building depreciation (2% DV / 1.5% SL) that had applied from 2020-21. Buildings remain in the tax base, so depreciation recovery still applies if you sell above book value. Commercial fit-out recorded separately from the building can still be depreciated (default class 10% DV / 7% SL).
What happens when I sell or dispose of a depreciated asset?
If you sell for more than the book value, the difference (up to the original cost) is clawed back as depreciation recovery income and taxed. If you sell for less than book value, you can claim the loss. This ensures the total deductions match the actual loss in value.
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Sources: IRD — Depreciation Rates. Check IRD — Investment Boost for eligibility before claiming the 20% deduction.
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