$20,000 instant asset write-off 2026 update

If you're an Australian small business owner, the Government has proposed extending the $20,000 Instant Asset Write Off to 30 June 2026 (legislation still pending). This could be a prime opportunity to upgrade your gear and reduce your tax bill.

The Essentials

Threshold: Write off the full cost of eligible assets costing less than $20,000 (exclusive of GST if registered and entitled to claim GST credits).

Eligibility: Your business must have an aggregated turnover of less than $10 million and use simplified depreciation rules.

“Ready” Rule: Assets must be first used or installed ready for use by 30 June 2026. Just paying the invoice isn’t enough, it has to be operational.

Potential Opportunity

If the extension passes, the $20,000 limit applies per asset. You could purchase multiple items (e.g. a $15,000 machine and a $3,000 laptop) and claim both immediately. After 30 June 2026, the threshold is proposed to drop back to $1,000 unless further extended.

Quick Tips

• Secondhand is fine: Both new and used equipment qualify
• Business use only: If an asset is 20% personal, you can only claim 80%
• Pool the rest: Assets costing $20,000 or more go into the small business depreciation pool (15% first year, 30% thereafter)

Planning equipment purchases? Your bookkeeper can help ensure they’re recorded correctly throughout the year.

This information is intended to be general in nature and is not personal financial advice. It does not take into account your objectives, financial situation or needs. Before acting on any information, you should consider the appropriateness of the information provided in relation to your own circumstances.