Low Value Assets NZ
Buying equipment for your business does not always mean waiting several years to claim the cost. Under New Zealand’s low-value asset rules, a qualifying asset costing up to $1,000 can generally be deducted in the year it is acquired or created, rather than depreciated over time.
The rule is useful for everyday purchases such as office equipment, phones and tools, but the price is not the only test. GST registration, private use and purchases made together can change the tax treatment.
What is a low value asset in New Zealand
For assets acquired from 17 March 2021, the Inland Revenue low-value asset threshold is up to $1,000. A qualifying asset can usually be claimed as an immediate business deduction instead of being added to the fixed asset register and depreciated over its useful life.
If you are GST registered, test the $1,000 threshold using the GST-exclusive cost.
If you are not GST registered, use the GST-inclusive amount you paid.
A deduction reduces taxable business profit. It does not mean Inland Revenue refunds the purchase price or reduces your tax bill by the full cost of the asset.
Common examples of low value assets
Depending on the cost and how they are purchased, qualifying items may include:
- a mobile phone or tablet used for business
- a printer, monitor or office chair
- small tools and workshop equipment
- a microwave or small appliance for a staff room
- a desk or other stand-alone office equipment.
The item must be acquired for the business. If it is also used privately, only the business-use portion is deductible. Keep a reasonable record showing how you worked out that percentage.
How to write off low value assets in NZ
Before claiming the cost, work through these checks:
- Confirm the asset is used or available for use in earning business income.
- Check that its full cost is no more than $1,000, using the correct GST treatment for your business.
- Make sure it is a stand-alone asset and not part of a larger asset or improvement.
- Check whether other assets bought from the same supplier at the same time have the same depreciation rate. These purchases may need to be treated together.
- Claim only the business-use portion and keep the invoice and calculation with your tax records.
Business records, including proof of asset purchases and sales, generally need to be kept for at least seven years.
Be careful when buying several items together
The $1,000 threshold does not always apply separately to every line on an invoice. If you buy several assets from the same supplier at the same time and the same depreciation rate applies, the combined purchase may fall outside the immediate deduction rule.
For example, one $400 office chair may qualify. Six matching chairs bought together for $2,400 may need to be treated as one purchase and depreciated. The same issue can arise when separate components form part of a larger asset or improvement.
What happens when an asset costs more than $1000
A business asset costing more than $1,000 will generally need to be capitalised and depreciated. Our Sole Traders Guide to Depreciation explains the straight-line and diminishing value methods, how the annual deduction is calculated and what records to keep.
Eligible new assets first available for use on or after 22 May 2025 may also qualify for Investment Boost. This allows a business to deduct 20% of the asset’s cost upfront, then depreciate the remaining 80% under the usual rules. Eligibility should be checked before the purchase is recorded.
Selling or changing the use of a written off asset
If you later sell an asset that was claimed as a low-value deduction, the sale proceeds are generally taxable in the year of sale. If the asset becomes mainly private, its market value when that change occurs may need to be returned as income. Tell your accountant when you sell, trade in or change the use of a business asset.
Need advice before claiming a business purchase?
It is often straightforward to claim a low-value asset, but GST, grouped purchases and mixed business and private use can make the answer less obvious.
ABA Chartered Accountants can review your asset purchases, apply the correct tax treatment and make sure they are recorded properly.
Contact ABA for practical advice for your business.
Frequently asked questions about low value assets NZ
Are low value assets depreciable in NZ?
Qualifying low-value assets are usually deducted in full in the year they are acquired or created rather than depreciated. Different rules can apply if assets are placed in a depreciation pool, so check the treatment with your accountant if you use pooling.
How do you write off low value assets in NZ?
Check that the asset qualifies under the $1,000 threshold, is used for earning business income and is not part of a larger purchase that must be treated together. Record the eligible business-use amount as a deduction and retain the invoice and supporting calculation.
Is a mobile phone purchase a low value asset in NZ?
A mobile phone can qualify if its full cost is no more than $1,000 under the GST rules applying to your business. If you also use the phone privately, only the business-use portion can be claimed. A phone costing more than the threshold will generally be depreciated.
Does the $1000 low value asset threshold include GST?
For a GST-registered business, the threshold is applied to the GST-exclusive cost. If you are not GST registered, use the GST-inclusive purchase price.
Can several items under $1000 each be written off?
Not always. Assets bought from the same supplier at the same time and subject to the same depreciation rate may need to be treated together. Items that become part of a larger depreciable asset may also fall outside the low-value rule.
This article provides general information only and is current at September 2026. Tax treatment depends on your circumstances and tax rules can change.
