Removal of commercial building depreciation from 1 April 2024

Posted on 27 May 2024

Andrew Millington

Director and Chartered Accountant

Starting from the 2024-25 financial year, the tax depreciation rate for commercial and industrial buildings will revert to 0%. However tax deductions for depreciation on commercial fit-outs will still be applicable.

Since 2010, there have been changes to the ability to claim depreciation deductions for long-lived buildings. In 2010, the ability to claim depreciation for all long-lived buildings (with a useful life of more than 50 years) was removed, with depreciation being reintroduced in 2020 for non-residential buildings as a COVID tax relief measure at that time. From 1 April 2024 and now the deductions will be removed again, setting the depreciation rate at 0% for non-residential buildings with a useful life of 50 years or more.

Key points

0% depreciation rate: while buildings will remain depreciable property, there won’t be any depreciation deductions, ensuring historical depreciation deductions are recoverable when the building is disposed of.
Applicability: the 0% rate applies to all long-lived buildings, regardless of when they were acquired, based on a whole-of-life assessment of their useful life as listed in the IRD depreciation tables.
Special depreciation rates: the Commissioner will no longer have the authority to set special depreciation rates for long-lived buildings.
Transitional provision for commercial fit-out: owners of buildings acquired before the 2010–11 income year who separated the commercial fitout component of their buildings using a 15% of the total building cost rate can still separate the cost of commercial fit-out using these rules and continue to depreciate it separately at a reduced straight-line rate of 1.5%.

Review your assets

As you prepare for the 2025 tax year, it’s important to review your current assets and depreciation schedules to ensure compliance and optimise tax planning strategies within the revised framework. Your provisional tax calculations may need to be adjusted.

Please get in touch with us to discuss how these changes impact your specific financial situation.

Cryptocurrency and tax: a growing blind spot for many professionals

Posted by Rajitha Serasinghe
on June 22, 2026

Most of our professional and doctor clients who own cryptocurrency would not describe themselves as crypto investors or traders. In many cases they purchased some Bitcoin or Ethereum several years ago, made a few trades, and then largely forgot about [read more...]

Investing has changed – but has your tax thinking kept up?

Posted by Maria Burcher
on June 8, 2026

For many years, New Zealanders looking to grow their wealth had two main options: term deposits and property. Building a diversified share portfolio in the style of Warren Buffett was often out of reach for ordinary investors, as buying a [read more...]

Why good monthly processes make year-end accounts easier

Posted by Andrew Millington
on March 5, 2026

As the end of the financial year approaches, attention often turns to year-end accounts and tax compliance. For many business owners, this can feel like a compressed, high-pressure process where everything needs to be finalised at once. In practice, the [read more...]