The $20,000 Instant Asset Write-Off: What It Means for 2025–26

If your business is planning to buy tools, equipment or other assets this financial year, the instant asset write-off is one of the simplest ways to bring forward a deduction. The $20,000 threshold has been extended for the 2025–26 year, so it's worth understanding exactly how it works before you spend.

What's changed for 2025–26

The Government has extended the $20,000 instant asset write-off for the period 1 July 2025 to 30 June 2026, and this extension is now law. In practical terms, eligible small businesses can immediately deduct the full cost of qualifying assets rather than depreciating them over several years.

There has also been an announcement that the write-off will be made a permanent $20,000 feature from 1 July 2026. That measure is not yet law, so it shouldn't be relied on for planning until it passes.

Who is eligible

The concession is aimed at small businesses. To use it, your business needs an aggregated turnover of less than $10 million, and you must use the simplified depreciation rules.

• Aggregated turnover under $10 million
• The asset costs less than $20,000
• It is first used, or installed ready for use, between 1 July 2025 and 30 June 2026

How the $20,000 limit actually works

The threshold applies on a per-asset basis. That means you can immediately write off several different assets in the same year, as long as each one individually costs less than $20,000. Buying five $8,000 assets is fine; a single $22,000 asset is not eligible for the instant write-off and would instead go into the general small business pool.

One detail that trips people up: the $20,000 limit is exclusive of GST if your business is registered for GST, and inclusive of GST if you are not registered. Check which side of that line you're on before assuming an asset qualifies.

Timing your purchase

The key test is when the asset is first used or installed ready for use — not when you order or pay for it. An asset ordered in June but not delivered and installed until July falls into the following year. If you're relying on the deduction for this year, make sure the asset is genuinely in service by 30 June.

This article is general information current as at August 2025 and is based on published ATO guidance. It isn't personal tax advice — thresholds and rules change, so please check your specific circumstances with us before acting.