The $20,000 Instant Asset Write-Off Is Now Permanent. Here's What That Means for Your Business
For years, it was the same story every June.
The instant asset write-off would be extended at the last minute, often just weeks before the end of the financial year, and business owners would scramble to buy equipment before the deadline.
That cycle is over. The $20,000 instant asset write-off is now a permanent part of the tax system for small businesses.
What's Changed
From 1 July 2026, small businesses with aggregated turnover under $10 million can immediately deduct the business portion of eligible assets costing less than $20,000.
The law has passed, and there's no end date. You no longer need to wait for each year's Budget to find out whether the write-off will continue.
How It Works
If you buy a qualifying asset and it's first used, or installed ready for use, during the income year, you can claim the business-use portion as a deduction in that year's return.
A few details that matter:
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The $20,000 limit applies per asset, so you can write off several items in the same year
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It has to cost less than $20,000. An asset costing exactly $20,000 doesn't qualify
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If you're registered for GST, the cost is measured excluding GST
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Second-hand assets can qualify
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If you also use the item privately, you can only claim the business-use portion
Paying for It Isn't Enough
The deduction belongs to the year the asset is first used or installed ready for use, not the year you pay for it.
Equipment ordered in June that doesn't arrive or isn't set up until July falls into the next income year.
What About Bigger Purchases?
Assets costing $20,000 or more go into your small business depreciation pool. They're depreciated at 15% in the first year and 30% each year after that.
And if your pool balance falls below $20,000 at the end of the year, you can write off the whole balance.
Why "Permanent" Changes How You Should Plan
The old June rush often led to rushed decisions. Equipment was bought because of a deadline, not because the business needed it.
Now you can plan purchases around your business rather than the tax calendar.
It's also worth remembering what the deduction actually does. It reduces your taxable income; it isn't money back. For a company paying tax at 25%, a $10,000 purchase saves around $2,500 in tax, so the business is still $7,500 out of pocket.
The right purchase is still one that makes sense for the business first. The write-off just makes it cheaper.
Before You Buy
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Check your turnover is under $10 million, including any connected businesses
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Confirm the asset will be used or installed ready for use before 30 June
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Keep the invoice and a note of when it was first used
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Work out a realistic business-use percentage for anything you'll also use privately
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Check with us before buying a car, as separate cost limits apply
Thinking About a Purchase?
Whether it's new equipment, a vehicle or an upgrade to your technology, a quick chat can help you time it well and get the most from the deduction.
Not sure where you stand? It's worth a conversation. Contact our office to book a time.