The instant asset write-off is one of the most useful tax incentives available to Australian small businesses. It allows you to deduct the full cost of eligible business assets up to $20,000, rather than depreciating them over many years.
The government has extended the write-off through to 30 June 2026, giving small businesses more time to upgrade equipment, invest in tools and improve efficiency.
This guide will walk you through everything you need to know in simple English so you can make the most of the concession.
What Is the Instant Asset Write-Off?
The write-off allows eligible small businesses to immediately deduct the full cost of assets costing less than $20,000 each.
It applies to:
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brand new assets
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second-hand assets
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multiple assets (the $20k limit applies per item)
Instead of claiming depreciation over many years, you claim the entire amount at once.
Who Is Eligible?
You can use the write-off if your business:
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has turnover under $10 million
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uses the simplified depreciation rules
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purchases and installs the asset between 1 July 2024 and 30 June 2026
This includes:
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sole traders
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companies
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partnerships
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trusts
What Types of Assets Can You Claim?
You can claim almost anything that is tangible and used for running your business. Common items include:
Tools & Equipment
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drills
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saws
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ladders
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cleaning machines
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trolleys
Technology
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laptops
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desktops
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tablets
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point-of-sale systems
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printers
Office Furniture
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desks
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chairs
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filing cabinets
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shelving
Vehicles
If purchased outright or under a chattel mortgage (NOT leased).
Workshop or Trade Gear
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compressors
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generators
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safety equipment
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lighting
What You Cannot Claim
The write-off does not apply to:
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assets costing $20,000 or more
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buildings or structural improvements
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leased equipment
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assets not used for business
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trading stock
If an asset costs $20,000 or more, it must go into your general depreciation pool.
Why This Write-Off Matters
1. Immediate tax savings
You reduce your taxable income in the same year you purchase the asset.
2. Better cash flow
Your tax bill drops quickly, giving you more room to reinvest.
3. Encourages upgrades
You can replace old or inefficient equipment without waiting for depreciation.
4. Multiple assets allowed
If each item costs under $20k, you can claim many items in one year.
Important Timing Rules
To claim the deduction:
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the asset must be purchased by 30 June 2026
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the asset must be installed and ready for use
This means:
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ordering an asset is NOT enough
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paying a deposit is NOT enough
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it must be working and available for business use
Example:
If you buy a computer on 29 June 2026 but it arrives on 5 July 2026, you cannot claim it that year.
Practical Example
A small marketing agency in Penrith buys:
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two new laptops for $3,500 each
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a desk for $1,200
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a large monitor for $1,800
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an office cabinet for $600
Total spend: $10,600
Since each item costs under $20,000, the business can immediately deduct the full $10,600 in the financial year.
If the business tax rate is 25%, this saves $2,650 on their tax bill.
Mistakes to Avoid
1. Buying assets too late
If delivery is delayed past 30 June 2026, you miss out.
2. Assuming vehicles are always eligible
Some cars may hit the luxury car tax threshold or not meet business-use requirements.
3. Forgetting to adjust for private use
If an asset is used 20% privately, you can only claim 80%.
4. Poor record-keeping
You must keep:
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invoices
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proof of installation
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usage logs (if mixed use)
How Carmody Accounting Can Help
We can help you:
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check if your purchase qualifies
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plan purchases to match cash flow
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ensure correct depreciation treatment
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avoid costly mistakes
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integrate asset planning into your wider tax strategy
We also help businesses understand if pooling rules or accelerated depreciation would be more beneficial.
FAQ
Can I claim second-hand equipment?
Yes, as long as it meets the cost and business use rules.
Can I finance the asset?
Yes. Purchases under a chattel mortgage qualify. Leased assets do not.
Can I claim multiple items?
Yes. The $20,000 limit applies per asset.
What if the asset is used partly for private purposes?
You can claim the business-use percentage only.