$20,000 Instant Asset Write-Off – Tips and Common Traps

In November 2025, Federal Parliament passed legislation confirming that the $20,000 instant asset write-off for small businesses will continue until 30 June 2026. This allows eligible businesses with aggregated turnover under $10 million to immediately deduct the business portion of the cost of eligible depreciating assets costing less than $20,000 (excluding GST where the business is registered for GST), provided the asset is first used or installed ready for use by 30 June 2026. While this concession can provide a useful tax benefit, there are a few key points businesses should keep in mind. Key tips

1. The $20,000 threshold applies per asset. This means multiple eligible assets under $20,000 may be immediately deductible.
2. Make sure the asset is ready for use. Ordering or paying for an asset before 30 June is not enough. The asset must be installed and ready for use by 30 June 2026.
3. Consider the timing of purchases. If your business is planning to upgrade equipment or technology, bringing forward these purchases before 30 June 2026 may provide an immediate deduction.

Common traps

1. Purchasing assets over $20,000, which generally need to be depreciated over time through the small business depreciation pool.
2. Assuming the deduction applies just because an asset was ordered before year-end.
3. Forgetting to apportion for private use where an asset is not used entirely for business purposes.

At this stage, the threshold is legislated to apply until 30 June 2026, after which it is scheduled to revert to $1,000 unless further changes are announced. If your business is considering asset purchases soon, particularly with the end of the financial year approaching, it may be worthwhile reviewing the timing with your accountant to ensure you make the most of the available deduction.