Tax, EOFY and the Instant Asset Write-Off: A Business Finance Guide
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Instant Asset Write-Off · EOFY · Business Finance
The Government has announced that the $20,000 instant asset write-off will be permanent from 1 July 2026, but the measure is not yet law. This guide explains the current legal status, who can use the write-off, what qualifies, how financed assets are treated, how GST changes the threshold test, and which EOFY finance decisions matter.
Quick Answer
The Government has announced a permanent $20,000 instant asset write-off from 1 July 2026 for small businesses with aggregated turnover under $10 million, but the ATO confirms the measure is not yet law. Until the Bill passes, the standing legislated threshold from 1 July 2026 is $1,000. Financing does not automatically prevent the deduction: the tax treatment depends on the agreement and whether the business is treated as holding the asset.
Previous income year
2025-26
The less-than-$20,000 threshold was law and applied per eligible asset first used or installed ready for use by 30 June 2026. That deadline has now passed.
Current legal status
From 1 July 2026 (2026-27)
The 2026-27 Budget announced a permanent $20,000 write-off, but the measure is not yet law. The Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 has not yet passed; it was referred to a Senate committee on 25 June 2026, reporting 13 August 2026. Until it passes, the standing legislated threshold is $1,000.
Status checked 10 July 2026. Sources: ATO and aph.gov.au. Confirm current guidance before acting.
What is the instant asset write-off and how does it work?
The instant asset write-off lets an eligible small business claim an immediate deduction for the business-use portion of an eligible depreciating asset costing less than the threshold for the income year, rather than depreciating that cost over several years. For 2025 to 2026 the threshold was $20,000 per asset and that setting was law. The Government has announced a permanent $20,000 threshold from 1 July 2026, but that measure is not yet law, and the standing legislated threshold is $1,000.
To use the concession, a business generally needs aggregated turnover under $10 million and must apply the simplified depreciation rules. Aggregated turnover counts the turnover of connected and affiliated entities, not just the entity making the claim, so a small company inside a larger group can fail the test. The concession is available across structures, so sole traders, partnerships, companies and trusts can all use it where the turnover and other tests are met. The write-off is a tax deduction, not a cash rebate. It reduces taxable income, so the cash value depends on the business's taxable position and tax rate. A business should not buy an asset solely for a deduction if the purchase does not make commercial sense. Our instant asset write-off glossary entry has the short version.
If you are searching for temporary full expensing, that COVID-era measure ended on 30 June 2023. The instant asset write-off is the immediate-deduction concession that remains for small business, with a much lower per-asset threshold.
The current rules and eligibility detail should always be checked against the ATO's instant asset write-off guidance or with a registered tax agent.
| Rule | Current position | Why it matters |
|---|---|---|
| Threshold, 2025-26 | Less than $20,000 per eligible asset, now law | Applied to assets first used or installed ready for use by 30 June 2026 |
| Threshold, 2026-27 onward | $20,000 announced as permanent, not yet law; standing default is $1,000 | Plan on the enacted law until the Bill passes Parliament |
| Business size | Aggregated turnover under $10 million | The turnover test is not the same as taxable profit |
| How the limit is applied | Separately to each asset | Multiple eligible assets may be claimed in the same year |
| Timing | First used or installed ready for use in the income year | Ordering or paying alone is not enough |
| Business-use portion | Only the business-use share (the taxable purpose proportion) is deductible | Private use must be excluded or apportioned |
| Assets at or above the threshold | Generally allocated to the small business pool | The deduction is spread over time rather than lost |
Swipe horizontally to compare the full table.
Is the $20,000 instant asset write-off permanent from 1 July 2026?
Not yet. The Government announced in the 2026-27 Budget that the $20,000 instant asset write-off will be permanent from 1 July 2026, but the ATO states the measure is not yet law. The Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 was referred to the Senate Economics Legislation Committee on 25 June 2026, and the committee is due to report on 13 August 2026. Until the Bill passes, the standing legislated threshold from 1 July 2026 is $1,000. The 2025-26 threshold itself was legislated in the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Act 2025 and is settled law.
The practical point is that a purchase made now cannot yet rely on a $20,000 write-off for the 2026 to 2027 income year. If the measure passes as announced it would apply from 1 July 2026, but planning should be based on the law as enacted, not the announcement. Passage is widely expected rather than guaranteed: small business concessions have support across politics, and the Coalition's Budget reply proposed a higher $50,000 threshold, but expectation is not law. The timing test also still matters each year: the asset must be first used or installed ready for use within the income year for which the deduction is claimed.
Because this is tax law and the position can change quickly, check the ATO's $20,000 instant asset write-off measure page before completing a purchase or lodging a return, and track the Bill's progress through the Parliament of Australia.
Should you buy equipment now or wait until the Bill passes?
If the announced measure becomes law, it is intended to apply from 1 July 2026, so an eligible asset bought now would fall within the permanent $20,000 write-off. If the Bill does not pass, an asset costing $1,000 or more would instead be pooled and deducted at 15% in the first year and 30% after that. Either way, a genuine business purchase made now is a delayed deduction at worst, not a lost one.
That changes what the decision is actually about. Waiting for the Senate committee to report on 13 August 2026 removes the legislative uncertainty, and if the purchase can sit for a few weeks at no cost to the business, waiting is the simpler path. If the asset is needed now to win or deliver work, the income it generates will usually matter more than whether the deduction lands up front or is spread through the pool. What does not make sense is rushing a purchase the business does not need to chase a threshold that is not yet law.
The financing decision is separate from the legislative one. Whether the write-off or the pool applies, an eligible business can generally fund the asset through a chattel mortgage and keep its cash, and the deduction position is the same as paying cash. This is general information, not tax advice, and the Bill's status should be confirmed before lodgment.
Does the $20,000 instant asset write-off apply per asset or in total?
The threshold applies separately to each eligible asset, not to the business's total purchases for the year. A business may therefore claim multiple assets where each asset individually costs less than $20,000 and each asset meets the other eligibility and timing requirements.
For example, three eligible items costing $8,000, $12,000 and $19,500 may each be tested separately. An asset costing exactly $20,000 is not less than the threshold and would generally move into the small business pool instead. The business-use percentage is applied after determining whether the asset's cost is below the threshold.
How much tax do you actually save with the instant asset write-off?
The write-off is a deduction, not a refund of the purchase price, so the cash benefit is roughly the deductible amount multiplied by the business's tax rate. A $20,000 write-off does not put $20,000 back in the bank. For a company taxed as a base rate entity at the current 25% rate, an eligible $18,000 asset used fully for business would reduce tax by about $4,500 in that year.
A sole trader saves at their marginal rate instead, so the same asset produces a different cash benefit depending on their other income. A business with no taxable profit for the year gets no immediate cash benefit at all; the deduction typically adds to a loss carried forward. The real advantage of the write-off over normal depreciation is timing: the same total deduction arrives up front rather than being spread over several years, which brings the cash benefit forward.
This is why the purchase decision should stand on its own. The asset still costs the business most of its price after tax, so the question is whether it earns its keep, and then how to fund it without straining cashflow. Figures here are illustrative and rounded; your actual saving depends on structure, rate and taxable position, which a registered tax agent can confirm.
What happens when you sell or trade in a written-off asset?
The sale or trade-in amount for an asset that was fully written off is generally brought back into the business's assessable income. The tax rules call that amount the asset's termination value, and for an asset deducted under the simplified depreciation rules, section 328-215 of the Income Tax Assessment Act 1997 includes the taxable purpose proportion of it in assessable income. Because the full cost was deducted up front, the tax system treats the proceeds as clawing part of that deduction back. This matters most when upgrading equipment: a trade-in on a machine you wrote off two years ago is not tax-free money towards the new one, it is assessable, and the new asset is then tested against whatever threshold applies in the year it is first used. Factor both sides into an upgrade decision, and have a registered tax agent confirm the treatment for your pool position.
Which assets qualify for the instant asset write-off, and which assets are excluded?
Most new or second-hand business depreciating assets can qualify where they cost less than the threshold and are first used or installed ready for use in the relevant income year, but specific exclusions apply. Common exclusions include capital works, certain software-related expenditure and assets leased or expected to be leased out for more than half the time.
Tools, machinery, office equipment, computers and some work vehicles are common examples, but eligibility depends on the asset and how it is used. Where an asset has both business and private use, only the business-use portion is deductible. The full cost is still used to test whether the asset is below the threshold.
| Asset or situation | Typical treatment | Important condition |
|---|---|---|
| Tools, plant and equipment | ✓ Commonly eligible | Must meet the cost, business-use and timing rules |
| New and second-hand assets | ✓ Both may qualify | The asset itself and the acquisition must be eligible |
| Work vehicles below the threshold | ✓ May qualify | Private use must be apportioned and car rules may also apply |
| Mixed business and private use | ~ Business-use share only | The full asset cost is still tested against the threshold |
| Assets leased out most of the time | ✗ Commonly excluded | Specific leasing exclusions apply |
| Capital works and building improvements | ✗ Not under this concession | Separate capital works rules generally apply |
| Software development pool expenditure | ✗ Not under this concession | Separate software rules may apply |
| Asset not ready by year-end | ✗ Not for that income year | Ordering, invoicing or paying does not satisfy the timing test by itself |
Swipe horizontally to compare the full table.
Check the complete exclusions and current rules on the ATO's instant asset write-off page.
Can you claim the instant asset write-off on a financed asset?
Financing an asset does not automatically prevent an instant asset write-off claim. The result depends on the agreement's legal and tax treatment, including whether the business is treated as holding or owning the asset for tax purposes.
A chattel mortgage commonly allows the business to claim depreciation or the instant asset write-off because the business owns the asset and the lender takes security over it. Hire-purchase and lease arrangements should be checked against the actual contract and current tax rules, because legal title, tax ownership, GST timing and the deduction available are related but not identical questions.
The broader lease against buy question is bigger than tax. Leasing can suit short asset lives, upgrade cycles and uncertain workloads, while owning suits assets the business will keep and work hard for years, and the write-off only ever attaches to the ownership side of that choice.
This is where finance advice and tax advice meet. A broker can explain the repayment structure, security and cashflow impact, while a registered tax agent should confirm who claims depreciation, how GST is treated and what deductions apply.
| Funding structure | Typical asset position | Can the business claim the write-off? | Typical deduction pattern | What to confirm |
|---|---|---|---|---|
| Chattel mortgage | Business commonly owns the asset from purchase | ✓ Commonly, if the asset and business are eligible | Depreciation or write-off plus business-use interest | Business-use percentage, GST entitlement and contract details |
| Hire purchase | Business uses the asset under a purchase arrangement | ~ Often possible, subject to tax treatment | Commonly depreciation plus a finance-charge component | Who is treated as holding the asset and how GST is accounted for |
| Finance lease | Financier generally retains legal ownership during the lease | ~ Do not assume | Lease-payment treatment may apply | Tax classification of the agreement and any purchase option |
| Paying cash | Business owns the asset outright | ✓ If the asset and business are eligible | Depreciation or write-off, with no interest deduction | Business-use percentage and GST entitlement |
Swipe horizontally to compare the full table.
Is the $20,000 instant asset write-off threshold GST-inclusive or GST-exclusive?
A business entitled to claim the full GST credit generally tests the threshold using the GST-exclusive cost, while a business with no entitlement to a GST credit generally uses the GST-inclusive cost. Partial-credit situations and unusual acquisitions should be checked separately.
A valid tax invoice supports a GST credit claim where one is available. The threshold test and the amount ultimately deducted are not always the same because private use, partial credit entitlement and other adjustments can affect the result.
Cars also have a separate annual depreciation limit. For the 2026-27 income year, the ATO car limit is $69,883 and the maximum GST credit on a car above the limit is $6,353. The car limit is a depreciation and GST-credit cap, not the instant asset write-off threshold and not a vehicle price cap.
| Question | Full GST credit available | No GST credit available |
|---|---|---|
| Cost generally tested against the threshold | GST-exclusive cost | GST-inclusive cost |
| GST credit | May be claimed with the required evidence | No GST credit |
| Private use | Business-use adjustment may be required | Business-use adjustment may be required |
| Partial GST entitlement | Get tax advice because the calculation can differ from the full-credit example | Get tax advice because the calculation can differ from the no-credit example |
Swipe horizontally to compare the full table.
Vehicle thresholds change by income year. Check the ATO's current car-threshold guidance.
Can you claim a ute or car under the instant asset write-off?
Only if the vehicle costs less than the threshold, and most new vehicles do not, so most utes, cars and other motor vehicles are depreciated through the pool or the general rules rather than written off instantly. The write-off threshold is the same for vehicles as for any other asset: the cost must be under $20,000, which in practice points to cheaper second-hand vehicles rather than new ones.
Two different caps get confused here. The write-off threshold decides whether an instant deduction is available at all. The car limit is a separate cap on how much depreciation and GST credit can ever be claimed on a "car", which for tax purposes means a vehicle designed to carry fewer than nine passengers and less than one tonne. A ute with a payload of one tonne or more, a van or a truck is not a "car" under that definition, so the car limit does not apply to it, but the write-off threshold and the pooling rules still do. Private use must be apportioned in every case.
| Vehicle | Car limit applies? | Instant write-off possible? | Usual outcome |
|---|---|---|---|
| Passenger car, new | ✓ Yes, $69,883 cap | ✗ Rarely, most cost $20,000 or more | Depreciated subject to the car limit |
| Second-hand car under $20,000 | ✓ Yes, but under the cap | ✓ Possible if eligible | May be written off, business-use portion only |
| Ute with payload of 1 tonne or more | ✗ No, not a "car" | ~ Only if under $20,000 | Usually pooled at 15% then 30% |
| Van or truck | ✗ No, not a "car" | ~ Only if under $20,000 | Usually pooled, or general rules apply |
Swipe horizontally to compare the full table.
For a work vehicle above the threshold, the deduction is not lost, it is spread, and the practical question becomes funding. Our piece on how a truck chattel mortgage, GST and depreciation work together walks a worked vehicle case, and vehicle classification should be confirmed with a registered tax agent because payload and design details decide the treatment.
What happens when an asset costs $20,000 or more?
An eligible asset costing $20,000 or more generally cannot be immediately deducted under the less-than-$20,000 write-off and is instead allocated to the small business simplified depreciation pool. The cost is generally deducted at 15% in the first year and 30% in later years, subject to the current rules.
The deduction is delayed, not necessarily lost. For a larger machine, vehicle or equipment purchase, the finance question is often more important than the immediate write-off question: how much cash should be retained, whether the asset will produce income quickly, and whether the repayments fit the business's seasonal cashflow.
| Asset cost | General tax treatment | Finance implication |
|---|---|---|
| Less than $20,000 | May qualify for an immediate deduction if all conditions are met | Cash or finance can be compared mainly on cashflow and total cost |
| Exactly $20,000 | Not less than the threshold, so generally pooled | Do not assume the write-off applies because the figure is $20,000 |
| More than $20,000 | Generally allocated to the small business pool | Funding structure can preserve working capital while deductions occur over time |
| Pool balance below the applicable threshold | The balance may be immediately deductible under the current pooling rules | Confirm the year-end pool calculation with a registered tax agent |
Swipe horizontally to compare the full table.
For larger purchases, see our guide to financing plant above the write-off threshold and our equipment finance page.
What does "installed ready for use" mean for the instant asset write-off deadline?
An asset must be first used or installed ready for use during the relevant income year, not merely ordered, invoiced, financed or paid for. A machine still in transit or awaiting installation at 30 June will generally not qualify for that income year.
"Ready for use" means the asset is in a condition and location where it can perform the business function for which it was acquired. The facts matter. A delivered laptop may be ready even if it has not been used yet, while a production line that still requires installation, power connection or commissioning may not be.
If the asset was ordered or even paid for before 30 June but first used or installed ready for use after it, the claim generally falls into the 2026 to 2027 income year instead, under whatever threshold is law for that year. That is exactly why the current Bill matters to anyone whose delivery slipped past the deadline: the deduction is not lost, but which rules apply to it now depends on the legislation.
When finance is arranged close to 30 June, ask the supplier about stock availability, delivery, installation and commissioning before relying on the deduction. Our guide to the installed ready for use test for machinery works through the timing steps in more detail.
Is business-loan interest tax deductible?
Business-loan interest is generally deductible to the extent the borrowed funds are used to produce assessable business income, while principal repayments are not deductible. Mixed business and private use generally requires apportionment.
The use of the borrowed money is more important than the label on the loan. Interest on funds used to acquire an income-producing business asset may be deductible even where the loan is secured against another asset. Conversely, a loan branded as a business loan does not make private spending deductible.
For an eligible asset financed under a chattel mortgage, the business may have two separate tax components: depreciation or an instant write-off on the asset, and a deduction for the business-use share of interest over the finance term. A registered tax agent should confirm the treatment for the actual agreement.
Is it better to finance an asset or pay cash before EOFY?
The better option depends mainly on cashflow, total finance cost and the asset's expected return, because financing does not automatically remove an otherwise available instant asset write-off. Paying cash avoids interest, while finance can preserve working capital for wages, stock, tax and unexpected costs.
Do not compare only the tax deduction. Compare the business's cash position after purchase, the repayment commitment, the value of keeping a cash buffer and the income the asset is expected to generate. A tax deduction reduces taxable income; it does not reimburse the full purchase price.
When financing is often the stronger cashflow choice
Financing can be useful where retaining cash has a clear operating value. It may fit when revenue is seasonal, the asset will generate income quickly, several purchases are due at once, or the business wants to keep a buffer for tax, payroll and stock. Our equipment finance page covers the common structures.
Finance may fit when
- Cashflow is seasonal or uneven
- The asset can earn revenue while it is being repaid
- Several purchases compete for the same cash
- A working-capital buffer is important
Cash may fit when
- Surplus cash remains after the purchase
- The asset is small relative to reserves
- Avoiding interest is the priority
- No near-term cash demands are expected
From our broking, indicative
In straightforward asset-finance files, the factors that most often determine speed are not the tax deduction. They are whether the asset is acceptable to the lender, whether the business has been trading long enough, whether financial information is current, and whether existing tax debt or payment arrangements were disclosed at the start.
- Newer ABNs can narrow the lender panel
- Larger or specialised plant may need a valuation
- Out-of-date lodgments can delay assessment
- Undisclosed ATO debt can damage lender confidence
Simple files inside lender fast-track limits can sometimes move in roughly 1-3 business days, while larger or more complex files may take longer. Timing varies by lender, asset and applicant profile. This is not an approval estimate or an offer.
Indicative only, based on Switchboard Finance broking experience. Actual timing, documentation and terms depend on lender policy and individual circumstances at the time of application.
What should a business put on its EOFY finance calendar?
An EOFY finance calendar should separate actions that must occur by 30 June from lodgment and payment obligations that fall after year-end. The aim is to protect deductions, keep records lender-ready and avoid making a rushed purchase solely for a tax outcome.
For asset purchases, the key timing question is whether the asset is first used or installed ready for use by 30 June. For super, a deduction generally depends on the contribution reaching the fund in time. From 1 July 2026, Payday Super also changes the operating cashflow rhythm: super is paid with wages at 12% of qualifying earnings and generally needs to reach the fund within 7 business days of payday. The changeover has a tail, because the June 2026 quarter contribution under the old quarterly system is still due by 28 July 2026, and the ATO's Small Business Superannuation Clearing House has been retired, so confirm your payroll software handles the new flow.
| Action | Timing | Tax or reporting reason | Why lenders may care |
|---|---|---|---|
| Check asset delivery and installation | Before 30 June | Determines the income year in which depreciation can start | Confirms the actual funding need and supplier timing |
| Reconcile income, expenses and bank accounts | Before accounts are prepared | Improves the accuracy of financial statements and returns | Current, internally consistent figures are easier to assess |
| Complete stocktake where required | At year-end | Closing stock can affect taxable income | Inventory movements help explain margins and working capital |
| Review genuine bad debts | Before year-end treatment is finalised | Specific conditions apply to claiming a bad-debt deduction | Removes unrecoverable receivables from management reporting |
| Consider prepaying eligible expenses | Before 30 June | Small businesses may bring forward up to 12 months of deductions | Prepayments change the year-end cash position lenders see |
| Check employee super processes | Every pay run from 1 July 2026 | Payday Super applies at 12% and contributions generally need to reach the fund within 7 business days | More frequent payments change short-term cashflow |
| Lodge the June-quarter BAS | Generally 28 July when self-lodging, subject to current ATO rules | Lodge on time even if you cannot pay in full; staying current avoids overdue lodgments | Lenders often distinguish a disclosed payment plan from unlodged obligations |
| Prepare a 90-day cashflow forecast | Before borrowing or major purchases | Not a tax requirement, but improves decision-making | Shows how repayments, tax, wages and stock fit together |
Swipe horizontally to compare the full table.
For the broader checklist, see the Australian Government's yearly financial tasks guidance and our EOFY finance playbook for self-employed business owners.
What changed for business finance in FY27?
FY27 changes affect both tax planning and day-to-day cashflow, and they split into measures that are law and measures that are only announced. Payday Super and the loss of deductibility for ATO interest are law. The permanent $20,000 instant asset write-off and the loss carry back have been announced but are not yet legislated, and the Consumer Data Right rollout is extending to non-bank lenders.
These changes should not be treated as one issue. The write-off affects the timing of asset deductions. Payday Super affects payroll cashflow. CDR changes how financial data may be shared with participating non-bank lenders. Loss carry back is relevant to eligible companies rather than all business structures. The status column below matters, because an announced measure should not be planned as settled.
| Change | Start | Legal status | Practical finance effect |
|---|---|---|---|
| Permanent $20,000 instant asset write-off | 1 July 2026, proposed | ✗ Announced, not yet law; Senate committee reports 13 August 2026 | If passed, ends the year-by-year threshold cycle; until then the standing threshold is $1,000 |
| Payday Super | 1 July 2026 | ✓ Law | Super is paid with wages and contributions generally need to reach the fund within 7 business days, moving super from a quarterly cashflow event to each pay cycle |
| Loss carry back | Proposed from 2026 to 2027 | ✗ Announced, not yet law | If passed, may allow eligible companies to use current losses against tax paid in the previous two income years |
| CDR for non-bank lenders | From mid-2026 | ~ Rules registered | Can make consent-based financial-data sharing easier as providers come into scope |
| ATO GIC and SIC deductions | From 1 July 2025 | ✓ Law | General interest charge and shortfall interest charge are no longer tax-deductible, increasing the after-tax cost of carrying ATO interest |
Swipe horizontally to compare the full table.
Sources: the ATO's $20,000 instant asset write-off measure page, business.gov.au changes from 1 July 2026, the Consumer Data Right rollout, and the ATO's guidance on denying deductions for ATO interest charges.
How does ATO tax debt affect business-finance eligibility?
ATO tax debt does not automatically prevent a business from obtaining finance, but lender policy varies and the way the debt is managed matters. Lenders commonly assess the balance, whether lodgments are current, whether a payment arrangement is in place, repayment conduct, recent cashflow and whether the debt was fully disclosed.
An active payment plan that is being met is generally easier to explain than overdue lodgments or an undisclosed liability. Some lenders will require tax debt to be cleared, some may allow it to remain under an acceptable arrangement, and some may consider refinancing it where the purpose, serviceability and overall position fit policy.
Two ATO mechanics are worth knowing. Interest continues to accrue under a payment plan, so an arrangement manages the debt rather than freezing it. And for PAYG withholding, GST and super, the ATO can issue a director penalty notice that makes company directors personally liable for those amounts, which is one reason lenders look hardest at how exactly those debts are being handled and why unpaid super is treated more seriously than most other liabilities.
The general interest charge and shortfall interest charge are no longer tax-deductible from 1 July 2025, which increases the after-tax cost of carrying ATO interest. That does not mean replacing tax debt with another loan is automatically better. Compare the interest rate, fees, term, security, repayment amount and the risk of turning an unsecured liability into a secured one.
For more detail, read our guides to business loans with ATO tax debt and working-capital finance compared with ATO interest.
The instant asset write-off is most useful when the tax rule and the business decision point in the same direction. Check the current threshold and its legal status, confirm that the asset and business qualify, understand how the finance agreement is treated, and make sure the asset is ready in the correct income year.
Key takeaway: the $20,000 threshold beyond 30 June 2026 is announced but not yet law, so confirm the Bill's status with the ATO before relying on it, and let the asset, timing, GST and ownership rules decide whether a claim is available.Instant Asset Write-Off and EOFY Finance FAQs
For the 2025 to 2026 income year, eligible small businesses with aggregated turnover under $10 million could immediately deduct the business-use portion of eligible depreciating assets costing less than $20,000 each, provided the asset was first used or installed ready for use by 30 June 2026. The threshold applies per asset. The Government has announced the same $20,000 threshold as permanent from 1 July 2026, but that measure is not yet law. See the ATO's instant asset write-off guidance.
Not yet. The 2026 to 2027 Budget announced a permanent $20,000 instant asset write-off from 1 July 2026, but the ATO states the measure is not yet law. The Bill was referred to a Senate committee on 25 June 2026, with a reporting date of 13 August 2026. Until it passes, the standing legislated threshold from 1 July 2026 is $1,000, so check the current ATO position before relying on the concession.
Financing an asset does not automatically prevent a claim. The result depends on the agreement and whether the business is treated as holding or owning the asset for tax purposes. A chattel mortgage commonly allows the business to claim depreciation or the write-off, while hire-purchase and lease treatment should be confirmed against the contract and current tax rules.
A business entitled to claim the full GST credit generally tests the threshold using the GST-exclusive cost. Where no GST credit is available, the GST-inclusive cost is generally used. Partial-credit situations should be checked with a registered tax agent. See our tax invoice glossary.
The threshold applies separately to each eligible asset, not to the business's total purchases for the year. A business may therefore claim multiple eligible assets where each asset individually costs less than $20,000 and meets the other requirements. Assets at or above the threshold generally move into the small business depreciation pool.
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