Last updated: 21 October 2026

Using the IRD depreciation rate finder can help New Zealand businesses identify the appropriate tax depreciation rate for eligible business assets and calculate their depreciation deductions. Whether you have purchased computers, office furniture, machinery, vehicles or specialised equipment, understanding the applicable rate and depreciation method is important for accurate tax reporting.

However, selecting a depreciation rate involves more than entering an asset name. You need to consider the asset’s classification, acquisition date, business-use percentage, cost, depreciation method and any special tax rules that apply.

This guide explains how to use Inland Revenue’s depreciation rate finder, understand the calculation methods and avoid common mistakes when managing business assets.

What Is the IRD Depreciation Rate Finder?

The IRD depreciation rate finder is an official Inland Revenue tool that helps taxpayers identify the depreciation rate for a business asset and calculate its depreciation value. It can also show a calculation of a gain or loss when an asset is disposed of, where applicable, and export calculation results to Excel.

Depreciation recognises the decline in value of eligible assets used to earn business income. Instead of necessarily deducting the entire cost of a long-term asset immediately, a business generally claims depreciation over the asset’s applicable tax life.

You can access the official tool here:

Use the IRD Depreciation Rate Finder and Calculator

The online calculator has acquisition-date limits. Inland Revenue directs users to historic depreciation rates for certain older assets, so check the tool’s eligibility requirements before relying on a calculation.

How to Use the IRD Depreciation Rate Finder

Follow these steps to find the applicable depreciation rate and calculate depreciation for an eligible business asset.

Step 1: Identify the asset

Determine exactly what the business purchased. For example, a laptop, commercial coffee machine, office desk and manufacturing machine may fall under different asset classifications and rates.

Use the asset description and the appropriate industry or asset category in Inland Revenue’s guidance. Do not select a rate solely because another business uses the same percentage for a seemingly similar item.

Step 2: Confirm the acquisition date

Check when the asset was acquired. The online finder and calculator covers assets other than buildings acquired on or after 1 April 2005, and buildings acquired on or after 19 May 2005. Different guidance may be needed for assets acquired before the applicable dates.

Step 3: Enter the relevant asset details

To calculate depreciation, you may need the asset’s original cost or adjusted tax value, business-use percentage, chosen depreciation method and disposal date if applicable. Keep invoices and other supporting records available so that the information entered is accurate.

Step 4: Choose the depreciation method

Inland Revenue provides two main methods for eligible assets:

• Diminishing value (DV): applies the depreciation rate to the asset’s adjusted tax value, so the deduction generally reduces as the asset’s tax value falls.
• Straight line (SL): generally calculates the same depreciation amount each year using the applicable rate and cost basis.

The total depreciation claimed over an asset’s life may be the same under either method, but the timing of deductions differs. Check which method is appropriate for your circumstances and apply the relevant rules consistently.

Step 5: Review and save the calculation

Review the selected asset category, rate, method and business-use details before using the result in your accounts or tax return. Save the calculation and supporting documents with your fixed-asset records.

IRD Depreciation Rate Finder: DV vs SL

Understanding the difference between diminishing value and straight-line depreciation helps businesses assess how deductions are recognised over time.

These are general descriptions. The applicable tax treatment depends on the asset and Inland Revenue’s rules. You do not have to use the same method for every asset, and method changes must be handled using the applicable rules.

Read Inland Revenue’s guidance on straight-line depreciation and diminishing value depreciation.

How to Calculate Business Asset Depreciation

The depreciation amount depends on the applicable rate, method, asset value and business-use percentage.

Example: Straight-line depreciation

Suppose a business purchases eligible equipment for $10,000 excluding GST, is entitled to claim GST input tax deductions, and the applicable straight-line depreciation rate is 20%. Assuming the asset is used entirely for business and the full cost is the relevant depreciable basis, the illustrative annual calculation is:

$10,000 × 20% = $2,000 per year

This is a simplified illustration, not a rate recommendation for a particular asset. The correct rate must be confirmed using Inland Revenue’s published rates or calculator, and other rules may affect the amount claimable.

Example: Diminishing value depreciation

Using the same illustrative $10,000 opening tax value and a hypothetical 30% diminishing value rate:

• First-year depreciation: $10,000 × 30% = $3,000.
• Illustrative closing tax value: $10,000 − $3,000 = $7,000.
• Next-year depreciation, assuming the same rate and no other adjustments: $7,000 × 30% = $2,100.

The deduction reduces as the adjusted tax value falls. Actual calculations must account for acquisition timing, business use, adjustments and other applicable tax rules.

What Assets Can You Depreciate in New Zealand?

Eligible depreciable assets commonly include equipment, computers, furniture, tools and machinery used to earn business income. The rate depends on the relevant asset classification and applicable Inland Revenue determination.

Some items do not depreciate for tax purposes, including land, trading stock, franchise fees and intangible assets such as goodwill. Buildings have their own rules and should not be treated like ordinary equipment.

Low-value assets

Eligible low-value assets may qualify for an immediate deduction instead of depreciation over time. Inland Revenue’s published threshold is generally $1,000 for qualifying assets acquired from 17 March 2021 onwards. Eligibility conditions apply, so confirm the current rules before treating an asset as an immediate expense.

Investment Boost for eligible new assets

For eligible new assets acquired from 22 May 2025, Investment Boost may allow a business to deduct 20% of the asset’s cost as an expense and then claim depreciation on the remaining 80%. Eligibility, exclusions and timing requirements apply. Check the current Inland Revenue guidance before applying the incentive to a purchase.

Depreciation on buildings

Building depreciation has changed over time. Inland Revenue states that from the 2025 income year, the depreciation rate for non-residential buildings with an estimated useful life of 50 years or more returned to 0%. Buildings remain in the tax base, and depreciation recovery may apply when a building is sold for more than its tax book value.

Because building rules depend on the asset and relevant income year, obtain advice before recording a building depreciation deduction or calculating the tax consequences of a sale.

What If Your Asset Is Not Listed in the IRD Depreciation Rate Finder?

If you cannot find a suitable asset classification, do not automatically select the closest-looking rate. Start by checking Inland Revenue’s General Depreciation Rates guide (IR265) and the relevant industry and asset categories.

If no general rate applies, or you believe the existing rate is unsuitable, Inland Revenue provides processes for applying for a depreciation determination. Depending on the circumstances, this may involve a provisional or special depreciation rate application.

See Inland Revenue’s guidance on depreciation determinations for details.

Common Mistakes When Using the IRD Depreciation Rate Finder

• Choosing the wrong asset category: similar-sounding items can have different classifications and rates.
• Using an outdated rate guide: check the relevant IRD publication and the asset’s acquisition date.
• Ignoring private use: where an asset is used partly for private purposes, the deductible amount may need to be adjusted.
• Claiming depreciation on a non-depreciable asset: items such as land and goodwill do not qualify for ordinary depreciation deductions.
• Overlooking GST treatment: GST-registered businesses generally calculate depreciation using the asset cost excluding recoverable GST; non-registered businesses generally include GST in the cost.
• Forgetting disposal adjustments: selling or disposing of an asset can result in a taxable gain or deductible loss, depending on the circumstances.
• Missing special rules: Investment Boost, low-value asset rules and building depreciation rules may affect the treatment.

Business Asset Records: What Should You Keep?

Accurate asset records help support depreciation calculations and tax return entries. Maintain records that identify:

• Asset description and category.
• Purchase date and invoice.
• Original cost and GST treatment.
• Business-use percentage, where relevant.
• Depreciation method and rate applied.
• Annual depreciation and adjusted tax value.
• Sale, disposal or other adjustments.
• Supporting documents for any special tax treatment.

Inland Revenue generally requires business records to be kept for at least seven years. Check the rules for your particular records and circumstances.

Frequently Asked Questions About the IRD Depreciation Rate Finder

1. What is the IRD depreciation rate finder?

It is Inland Revenue’s online tool for finding depreciation rates and calculating depreciation for eligible business assets. It can also calculate disposal gains or losses where applicable.

2. Is the IRD depreciation rate finder free to use?

The tool is provided by Inland Revenue on its official website. You can access it through the depreciation section of ird.govt.nz.

3. What is the difference between DV and SL depreciation?

Diminishing value applies a rate to an asset’s adjusted tax value, so deductions generally decrease over time. Straight line generally produces an even annual deduction based on the applicable cost basis and rate.

4. Can I claim depreciation on a laptop or office equipment?

Eligible business laptops and office equipment can generally be depreciated, subject to the relevant asset classification, business-use rules and any applicable low-value asset treatment. Confirm the rate using Inland Revenue’s guidance.

5. Can I immediately deduct an asset costing less than $1,000?

Some qualifying low-value assets costing less than $1,000 may be immediately deductible. Conditions apply, including rules about the asset, acquisition and related purchases. Check current IRD guidance before claiming the deduction.

6. Can I change my depreciation method?

Inland Revenue allows businesses to change depreciation methods at the end of a year, subject to applicable rules. If you change methods, the adjusted tax value is used to calculate depreciation under the new method where required.

7. What if I cannot find my asset in the depreciation rate finder?

Check the General Depreciation Rates guide (IR265) and the relevant asset categories. If no suitable rate applies, you may need to consider whether a provisional or special depreciation rate determination is appropriate.

8. Can I depreciate commercial buildings in New Zealand?

Building depreciation is subject to specific rules. From the 2025 income year, the rate for non-residential buildings with an estimated useful life of 50 years or more returned to 0%. Check the applicable rules for the building and income year before claiming depreciation.

9. Does depreciation reduce my tax bill dollar for dollar?

No. Depreciation is generally a deduction used when calculating taxable income, not a dollar-for-dollar tax credit. The actual tax effect depends on the business’s taxable income, tax position and applicable rules.

Need Help With Business Asset Depreciation?

Using the IRD depreciation rate finder is a useful starting point, but choosing the right asset classification, applying the correct rate and accounting for GST, private use, Investment Boost or disposal adjustments can require careful review.

Before you finalise your next tax return, get your asset depreciation reviewed by an accounting professional. DFK Orb360 O’Halloran can help your business review fixed-asset records, understand depreciation treatment and identify questions that may need to be addressed before tax filing.

Official IRD Resources

• Inland Revenue: Claiming depreciation
• Depreciation rate finder and calculator
• Depreciation guidance and IRD publications
• Depreciation rate determinations

Disclaimer: This article provides general information for New Zealand businesses and is not personalised tax, accounting or legal advice. Depreciation treatment depends on the asset, acquisition date, use and current tax rules. Confirm the applicable requirements with Inland Revenue or a qualified adviser before filing your return.