Buying Machinery Before 30 June: The Real EOFY Test
Machinery Before EOFY: The Real Test | Switchboard Finance
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Chattel Mortgage · Instant Asset Write-Off · EOFY Timing
Buying Machinery Before 30 June: The Real EOFY Test
The myth is simple: buy the machine before 30 June and the write-off is yours. The rule is stricter than that. What actually counts is whether the machine is installed and ready for use in time, and whether it even fits under the write-off limit in the first place.
Quick Answer
Buying machinery before the end of the financial year only earns this year's deduction if it is installed ready for use in time, not just ordered or invoiced. Most machinery costs more than the instant asset write-off limit, so it is pooled and depreciated rather than written off.
The myth: spend before 30 June and the write-off is yours
It is the most common misconception of the EOFY season, and it quietly costs people deductions: the idea that if you buy the machine before 30 June, the write-off is automatically yours. The rule is stricter than the purchase date. What the instant asset write-off actually tests is whether the asset is first used or installed ready for use by 30 June, so an order placed and paid for in June counts for nothing if the machine is not in place and working in time.
That is the line that trips manufacturers up most: delivered is not the same as installed. A press brake that lands on the dock on 28 June, still strapped to its pallet, has not been installed ready for use. The same machine, craned into position, wired in and commissioning tested by 30 June, has. The deduction follows the second date, not the invoice.
The question that lands on my desk most in June is whether a paid invoice is enough to lock in the claim. It is not, and that one detail is the difference between a deduction this year and a deduction next year.
Most machinery is over the limit, so it pools rather than writes off
Here is the part the loudest EOFY marketing skips: most manufacturing machinery is worth more than the write-off limit, so it does not get written off in one hit at all. The instant asset write-off limit is applied per asset for small businesses with aggregated turnover under $10 million. An asset that comes in under the limit can be deducted in full the year it is installed. An asset at or above the limit goes into the small business pool instead, where it is depreciated indicatively at around 15 percent in the first year and 30 percent after that.
For a manufacturer, that usually means a single serious machine, a CNC router, a laser cutter, an injection moulder, is a pooling decision rather than a same year write-off. That is not a problem, it is simply a different mechanism, and knowing which one applies to each depreciating asset before you buy is the whole point of getting the timing right.
$20,000 is the instant asset write-off limit for the 2025-26 income year, for assets first used or installed ready for use by 30 June 2026, for small businesses with aggregated turnover under $10 million, applied on a per asset basis.Australian Taxation Office, as at June 2026
What passes the test, and what fails
It comes down to a clean checklist, and the two columns below are how it usually sorts out. The thing to notice is that every item on the left turns on being installed and used in time, while every item on the right is a machine that exists on paper but not yet on the floor.
Passes the test
- Delivered, installed and commissioning tested by 30 June
- Under the limit, or knowingly pooled and depreciated above it
- Genuinely used in the business, with the business use portion claimed
- Funded on a structure lined up before the spend
- A purchase that made sense before the deadline ever existed
Fails the test
- Ordered and paid for, but still in transit on 30 June
- Delivered to the yard but not yet installed or wired in
- Arriving in July, with the claim assumed for this year
- Bought only to chase a deduction you cannot really use
- Assumed to be a full write-off when it is actually pooled
If your machine sits in the right column, it is not lost, it just belongs to next year. The cost rolls into the new financial year. From 1 July 2026 the write-off limit is legislated to drop to $1,000, and the announced permanent $20,000 is not yet law, so do not assume this year's $20,000 limit will still apply. The mistake is assuming this year's claim when the machine will not be working in time.
Funding it: where the chattel mortgage fits
From the underwriter's seat, the finance and the deduction are two different questions running on two different clocks. A chattel mortgage funds the machine and the lender registers its security interest on the national Personal Property Securities Register; that is a finance step, and on a clean chattel mortgage or a low doc asset finance file it can move quickly. What the finance cannot do is change the install date the ATO tests against.
That is why sequencing matters more than speed at this time of year. A chattel mortgage is often structured with a balloon payment to keep the monthly cost down, and the structure should suit the asset rather than the deadline. The chattel mortgage small business guide walks through that structure, the upgrade versus refinance read covers the plant replacement case, and the shape of it across machinery, premises and cashflow is mapped in the manufacturing loan pack.
None of this needs to be worked out alone in the last week of June. A broker can line up the finance so the machine is paid for and installable in time, and your accountant confirms whether the deduction is worth chasing this year at all.
Buying machinery before 30 June is a structural test, not a spending one. The write-off follows the install date, not the invoice, and most machinery sits above the limit, so it pools and depreciates rather than writing off in a single year. Get the machine installed ready for use in time, know in advance whether it writes off or pools, and fund it on a structure lined up before the spend.
Key takeaway: the deadline is the install date, not the order date, and most machinery pools rather than writes off, so confirm the timing and the tax with your accountant before you buy.Frequently Asked Questions
Installed ready for use means the machine is in place and able to do its job by 30 June, not merely ordered, paid for or delivered to the yard. The instant asset write-off follows that install date, so a machine wired in and running counts this year, while one still strapped to a pallet does not. Your accountant confirms the date your asset actually met that test.
Machinery that costs more than the instant asset write-off limit cannot be written off in one hit. Once an asset is at or above the limit it goes into the small business pool and is depreciated instead, indicatively at 15 percent in the first year then 30 percent after that. Most manufacturing machinery sits above the limit, so pooling is the normal outcome rather than the exception, and a chattel mortgage still funds the purchase either way.
A chattel mortgage does not change whether you get the write-off; it is a way to fund the machine, while the deduction is a separate tax question that turns on the install date and the cost of the asset. You can finance a machine on a chattel mortgage and still claim the write-off, provided the asset is installed ready for use in time and sits under the limit. The finance and the tax run on two different clocks.
The $20,000 instant asset write-off is not yet permanent. The government has announced a permanent $20,000 write-off from 1 July 2026 for businesses with turnover under $10 million, but that measure is not yet law, so the current rules run to 30 June 2026 as legislated. From 1 July 2026 the limit is legislated to revert to $1,000 unless that measure passes, so the safe approach is to treat this year's claim as the certain one and plan later purchases against the write-off rules that actually apply when you buy.
A machine that is delivered but not installed ready for use by 30 June does not qualify for this year's instant asset write-off, because the deduction follows the install date rather than the delivery or invoice date. The cost rolls into the new financial year. From 1 July 2026 the write-off limit is legislated to drop to $1,000, and the announced permanent $20,000 is not yet law, so do not assume this year's $20,000 limit will still apply. This is exactly why sequencing the order, delivery and commissioning early matters more than a last-minute purchase, and a chattel mortgage guide shows how the funding fits around it.
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