Buy Plant Before 30 June or Wait for the FY27 Write-Off?
Buy Plant Now or Wait for FY27? | Switchboard Finance
Manufacturing
Instant Asset Write-Off · Chattel Mortgage · FY27
Buy Plant Before 30 June or Wait for the FY27 Write-Off?
The rush-or-wait call has changed shape this year. With the write-off now set up to become a permanent feature, the old final-week scramble is softer, and for many manufacturers waiting for the new financial year is a rational default. The real test is simpler than the tax: can the plant be installed ready for use in time, and do you need it now?
Quick Answer
Buy now or wait comes down to one gate: can the asset be installed ready for use in time, and do you genuinely need it now? With a permanent write-off announced from 1 July 2026 but not yet law, the instant asset write-off rush looks softer this year, and a chattel mortgage funds either path.
The rush-or-wait call, in one question
The fastest way to settle the rush-or-wait call is to ask whether the asset can be installed ready for use by 30 June, because if it cannot, the decision has already been made for you. The instant asset write-off applies in the income year an asset is first used or installed ready for use, not the year you sign the order or pay the deposit. The first thing I check on a late-June equipment enquiry is the supplier lead time, because a machine that lands and is commissioned in July is an FY27 asset whatever the invoice date says.
That single test does more work than the tax question. If a press, CNC cell or packing line is genuinely needed and can be commissioned in time, the timing looks after itself. If it cannot, you are choosing between buying a depreciating asset you will deduct next year anyway, or simply waiting until the new year begins. Where this commonly lands is that the calendar, not the strategy, makes the call.
Why this is the no-cliff year
This is the no-cliff year because the write-off is now set up to become a permanent feature rather than a use-it-or-lose-it deadline. A permanent twenty-thousand-dollar write-off from 1 July 2026 for businesses with turnover under ten million was announced in the 2026-27 Budget, but it is announced, not yet law, and still has to pass Parliament. The honest framing is that the write-off is now a permanent feature, announced not yet law.
That matters for timing. In past years the EOFY rush was driven by a hard cliff, where the threshold was legislated to fall sharply on 1 July. If the permanence measure passes, there is no such cliff for under-ten-million businesses, so deferring a purchase into the new financial year carries far less tax risk than it used to. Until it is law, treat it as the working assumption rather than a certainty, and keep the current legislated position in view.
When buying before 30 June is still the stronger fit
Buying before 30 June is still the stronger fit when you have a genuine, near-term need for the plant and a realistic path to having it installed ready for use in time. The decision splits cleanly once you separate the real driver, capacity, from the tax tail.
Stronger fit: buy now
- You have a real, near-term capacity need, not just a deduction to chase
- The supplier can deliver and commission the asset before 30 June
- You want the deduction reflected in this year's return
- Cash flow supports it, or a chattel mortgage funds it without draining the buffer
Where it gets tricky
- The asset cannot be installed ready for use by 30 June, so it is an FY27 asset anyway
- The main reason to buy is the write-off, not the work in front of you
- The purchase would drain the working capital you need for the quiet quarter
- Lead times are uncertain and the supplier cannot commit to a commissioning date
Where it gets tricky is almost always the same story: a sound business reason to upgrade collides with a timeline that does not cooperate. In that case, protecting your working capital usually beats forcing a purchase into the final week, and you can revisit the buy in early FY27 with a clearer head. The way the asset is secured does not change this calculus, only the need and the timing do.
Financing the asset with a chattel mortgage, either way
A chattel mortgage funds the plant whether you buy now or wait, because the finance structure sits independently of the write-off timing. You take ownership of the asset at purchase and the lender holds security over it until the loan is repaid, which is the same arrangement most manufacturers already use for equipment finance. A 3 to 5 year term is typical on plant and machinery, illustrative and varies by lender, and a balloon or residual can be set at the end to manage the monthly cost.
Speed is rarely the constraint. Funding commonly takes around 2 to 5 business days once your documents are complete, indicative and varies by lender, so the supplier's commissioning timeline, not the loan, decides whether an asset is installed ready for use by 30 June. Financing also does not change your eligibility for the write-off: because you own the asset from settlement, you can claim the deduction on a chattel-mortgage-financed asset just as you would on a cash purchase, subject to the usual turnover and cost limits. If you are weighing the structure, our chattel mortgage small business guide, the manufacturing loan pack and the manufacturing hub set out what lenders look for, and a balloon payment can be tuned to your cash flow.
The rush-or-wait call is no longer driven by a tax cliff. With the write-off announced as a permanent feature from 1 July 2026, but not yet law, the deciding factor is whether the plant is genuinely needed and can be installed ready for use by 30 June. A chattel mortgage funds the purchase on either side of the year line, so the finance follows the decision rather than forcing it.
Key takeaway: buy before 30 June only when the need is real and the asset can be commissioned in time; with the write-off announced as permanent but not yet law, waiting for FY27 is the measured call rather than a missed deduction.Frequently Asked Questions
The $20,000 instant asset write-off is not yet permanent from 1 July 2026; a permanent version was announced in the 2026-27 Budget but it is not yet law. Until it passes Parliament, the legislated position is that the threshold reverts to a lower amount from that date, so it is worth watching before you lock in timing. You can read how the write-off works in our instant asset write-off glossary entry.
You can generally claim the instant asset write-off on equipment financed with a chattel mortgage, because the write-off is tied to the asset being first used or installed ready for use, not to how you pay for it. With a chattel mortgage you take ownership at purchase, which is what allows the deduction to be claimed in the relevant year. Eligibility still depends on your turnover and the asset cost, so confirm the detail with your accountant.
'Installed ready for use' means the asset is in place and capable of being used for its intended business purpose, not merely paid for or delivered in a box. This matters because the write-off applies in the income year the asset is first used or installed ready for use, so a machine that arrives in July is an FY27 asset even if you paid in June. It is the single test that most often decides the depreciating asset timing question.
A chattel mortgage typically funds in around 2 to 5 business days once your documents are complete, though this is indicative and varies by lender. If you are trying to have plant installed ready for use by 30 June, the funding window is rarely the bottleneck; supplier lead time usually is. Our chattel mortgage small business guide walks through what lenders need to move quickly.
Whether it is better to buy equipment now or wait until the new financial year depends on genuine need and timing, not the deduction alone. Because the write-off is announced as permanent from 1 July 2026 but not yet law, there is less pressure to rush a purchase you do not yet need, and protecting your working capital can matter more than the timing of a write-off. Where the need is real and the asset can be installed in time, buying now still makes sense.
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