Date: 26 August 2026
Good news for small businesses. After years of temporary extensions, the Federal Government has now made the $20,000 instant asset write-off a permanent part of the tax system for eligible businesses with turnover under $10 million.
Before rushing out to buy a second hand ute, trailer, piece of machinery or office equipment, here are a few things worth remembering:
The $20,000 limit applies per asset
- You may be able to claim multiple assets, provided each costs less than $20,000 (excluding GST for business registered for GST)
The asset must be ready for use
- Ordering or paying a deposit isn’t enough.
- The asset generally needs to be installed and ready for business use by 30 June to claim the deduction in that financial year.
A deduction is not a cash refund
- A $20,000 deduction does not save $20,000 in tax.
- For a company paying tax at 25%, a $20,000 deduction may reduce tax by around $5,000.
- Sole traders and partners in a partnership may save more or less depending on the owners’ marginal tax rates.
Selling the asset later can trigger tax
- If you fully write off an asset and later sell it, the sale proceeds will generally be taxable.
- The write-off brings the deduction forward. It doesn’t make future sale proceeds tax-free.
The bottom line?
The instant asset write-off can provide a valuable cash flow benefit by bringing a tax deduction forward. However, the asset still needs to be paid for, and any future sale proceeds will generally be taxable.
Buy assets because your business needs them, not just for the tax deduction.
As always, keep good records and retain supporting invoices for any asset purchases
Like more information or to schedule a discovery call? Contact | Roberts + Morrow
Article written by Ben Quast, Associate- Business Services
Disclaimer This article provides a general overview only and does not take into account your personal situation or specific eligibility. We recommend seeking tailored advice before making decisions or lodging applications.
