The $20,000 instant asset write-off is available for the 2025-26 income year, giving eligible small businesses the opportunity to immediately deduct the cost of certain assets.

If you are planning to purchase or upgrade equipment, vehicles or technology before 30 June 2026, this is an important measure to consider as part of your tax planning.

Who is eligible?

You may be eligible if your business:

• Has an aggregated annual turnover of less than $10 million
• Uses the simplified depreciation rules.

Eligible businesses can immediately deduct the business portion of assets costing less than $20,000.

What assets qualify?

To qualify:

• The asset must be first used or installed ready for use for a taxable purpose between 1 July 2025 and 30 June 2026
• The cost must be less than $20,000
• The threshold applies on a per asset basis, so multiple assets can be written off.

Both new and second-hand assets may qualify. Some exclusions and limits apply depending on the asset type and your circumstances.

Improvements to existing assets

If you have previously claimed a deduction for an asset under the simplified depreciation rules, you may also be able to immediately deduct the first improvement cost for that asset if:

• The improvement cost is less than $20,000, and
• It was incurred between 1 July 2025 and 30 June 2026

What if the asset costs $20,000 or more?

Assets costing $20,000 or more cannot be immediately written off. Instead, they are added to the general small business pool and depreciated at:

• 15% in the first income year
• 30% in each subsequent income year.

Record keeping requirements

The usual deduction rules still apply. You must:

• Claim only the business-use portion
• Ensure the asset is used for a taxable purpose
• Keep appropriate records to substantiate your claim.

Planning ahead

The instant asset write-off can provide a valuable cash flow benefit when structured correctly. Timing, eligibility and how the purchase fits within your broader tax position are all critical considerations.

If you are considering purchasing assets before 30 June 2026, now is the time to review your plans. Reach out to our team to discuss your eligibility, model the tax impact and ensure your purchase is structured in the most effective way for your business.