Global Daily Tax News, NZ Enacts Legislation To Implement 2025 Budget Pledges, (May 30, 2025)

Legislation to give effect to measures announced in New Zealand's 2025 Budget has received Royal Assent.

The Taxation (Budget Measures) Bill 2025 (No 2) received Royal Assent on May 29, 2025, having been passed by lawmakers on May 22, 2025.

The legislation introduces a new new partial expensing regime called "Investment Boost", which will provide businesses an immediate tax deduction for new assets equal to 20 percent of the purchase price of the asset.

The Government earlier confirmed Investment Boost will apply to new assets purchased in New Zealand as well as new and used assets imported from overseas. It includes commercial buildings but excludes land, residential buildings, and assets already in use in New Zealand. There will be no cap on the value of eligible investments, and all businesses, regardless of size, can benefit.

Meanwhile, the legislation implements numerous changes to the KiwiSaver scheme, including extending eligibility for the KiwiSaver Government contribution and employer matching to 16- and 17-year-olds. Further, the Bill will implement the following changes:

• increasing the default employee and employer contribution rate from three percent to 3.5 percent from April 1, 2026, and then to four percent from April 1, 2028;

• allowing KiwiSaver members to apply to Inland Revenue for a temporary reduction of their contribution rate to three percent;

• removing the Government contribution for all KiwiSaver members with taxable income over NZD180,000 per year; and

• halving the rate of the government contribution to 25 cents per dollar contributed to a maximum of NZD260.72.