NZ Depreciation Calculator
Calculate depreciation on business assets. Compare diminishing value vs straight line methods to maximise your tax deductions.
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 methods to maximise your deductions.
$1,000
Low-Value Threshold
DV
Higher Early Deductions
SL
Equal Annual Deductions
0% / 2%
Residential / Commercial
IRD Depreciation Rates Reference
| Asset | DV Rate | SL Rate | Useful Life |
|---|---|---|---|
| Desktop/Laptop Computer | 50% | 40% | 4 years |
| Office Furniture | 12% | 8% | 15.5 years |
| Motor Vehicle | 30% | 21% | 6.5 years |
| Mobile Phone | 67% | 67% | 3 years |
| Software (purchased) | 50% | 40% | 4 years |
| Photocopier | 30% | 21% | 6.5 years |
| Commercial Building | 2% | 1.5% | — |
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.
Once you choose a method for an asset, you must continue using that method for its lifetime unless you have a valid reason to change.
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?
Use DV if you want larger deductions in the early years — it reduces taxable income more upfront. Use SL if you prefer consistent, predictable deductions. Most businesses choose DV for assets that lose value quickly (computers, phones) and SL for longer-lived assets.
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?
Residential buildings have a 0% depreciation rate — no deduction is available. Commercial and industrial buildings can be depreciated at 2% DV or 1.5% SL. This was reintroduced for commercial buildings from the 2020-21 tax year.
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.
Related Calculators
Sources: IRD — Depreciation Rates. Last updated April 2026.