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Income Tax Act 2007

Timing and quantifying rules - Depreciation

EE 29: Economic rate for certain aircraft and motor vehicles

You could also call this:

“How certain aircraft and motor vehicles lose value for tax purposes”

This section talks about how fast certain aircraft and motor vehicles lose value over time for tax purposes. You need to know this if you own these types of vehicles.

For aircraft, the rate of value loss is 10% per year if you use a method called diminishing value, or 7% per year if you use a straight-line method. This applies to aircraft that fly by themselves, have wings that don’t move, aren’t used for international flights, aren’t used for putting fertiliser on fields or spraying crops, and aren’t helicopters.

For motor vehicles, the rate of value loss is 30% per year using the diminishing value method, or 21% per year using the straight-line method. This applies to vehicles made mainly for carrying people, with seats for up to 12 people. The vehicle must not be available for hire, or if it is, it must be for hire periods longer than a month. It can also be a small passenger service vehicle or a minibus.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514598.

Topics:
Money and consumer rights > Taxes
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EE 28: Economic rate for buildings, or

"How the tax office sets depreciation rates for buildings"

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EE 30: Economic rate for plant, equipment, or building, with high residual value, or

"How to set depreciation rates for high-value plant, equipment, or buildings"

Part E Timing and quantifying rules
Depreciation

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EE 29Economic rate for certain aircraft and motor vehicles

  1. This section gives the economic depreciation rate for certain aircraft and motor vehicles.

  2. The economic rate for an aircraft is a diminishing value rate of 10% or a straight-line rate of 7% if the aircraft—

  3. is self-propelled; and
    1. has fixed wings; and
      1. is not an international aircraft; and
        1. is not used for top-dressing or spraying; and
          1. is not a helicopter.

            1. The economic rate for a motor vehicle that is designed exclusively or mainly to carry persons and has seats for no more than 12 persons is a diminishing value rate of 30% or a straight-line rate of 21% if the motor vehicle—

            2. is not available for hire:
              1. is available for hire for a hire period of more than 1 month:
                1. is a small passenger service vehicle:
                  1. is a minibus.

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                    Notes
                    • Section EE 29(3)(c): amended, on , by section 110(3) of the Land Transport Amendment Act 2017 (2017 No 34).