It labelled the film's violence as "high impact, cruel and extensive" and said "sexual violence dominates the latter part of the film".
"The movie is almost entirely centred around the violent activities which occur when the young people break into the veteran's house to steal his money," its decision read.
"From shortly after they break in the film depicts extreme violence, perpetuated by both the veteran and the intruders."
In America, Don't Breathe received an 'R' rating, meaning those aged under 17 needed to be accompanied by a parent or adult guardian to see the film.
The board said New Zealand's problem with domestic violence played into its decision.
"The consideration by the Board of this movie comes shortly after the government's announcement that domestic violence in New Zealand is at such a level and of such a concern that significant political and social measures are necessary to address this problem.
"It is known as well that New Zealand society has an issue with violence ... The Board therefore assumes that for New Zealand society movies which depict extreme violence and sexual violence towards woman are of concern to New Zealand society as a whole. "
It concluded that a rating any lower than R18 "would disturb young people, so it would be injurious to public good".
Don't Breathe was a surprise hit overseas and fared well with critics, with an 88 per cent approval rating on Rotten Tomatoes.
"Don't Breathe is a breathless, visceral, nerve-racking thrill ride that doesn't stop coming at you until its final gasps," wrote the Detroit News.
