Good news for small-business owners: the $20,000 instant asset write-off is here to stay.
If you’ve been putting off equipment purchases because the instant asset write-off seemed to change from year to year, there’s now significantly more certainty when planning your business investments.
As announced in the 2026–27 Federal Budget, the $20,000 instant asset write-off has been made a permanent feature of the tax system for eligible small businesses.
Without this change, the threshold was due to fall back to just $1,000 from 1 July 2026.
How Does the $20,000 Write-Off Work?
Eligible small businesses with an annual turnover of less than $10 million that use the simplified depreciation rules may be able to immediately deduct the taxable-purpose portion of eligible assets costing less than $20,000.
The asset must be:
- Used for a taxable purpose in the business; and
- First used, or installed and ready for use, on or after 1 July 2026.
Importantly, the $20,000 threshold applies to each individual asset, rather than being a total annual limit.
That means a business could potentially purchase multiple eligible assets during the year and claim an immediate deduction for each one, provided the relevant eligibility requirements are met.
What Can You Buy?
The instant asset write-off can apply to a broad range of business assets.
Depending on the circumstances, examples may include:
- Computers and other technology
- Tools and equipment
- Office furniture
- Machinery
- Business equipment
- Certain vehicles used for business purposes
The key is that the asset must meet the relevant eligibility requirements and be used for a taxable business purpose.
Timing Still Matters
While making the $20,000 threshold permanent provides greater certainty, when you purchase an asset isn’t the only timing consideration.
Generally, an eligible asset needs to be first used or installed ready for use before the deduction can be claimed.
Simply purchasing or paying a deposit for equipment doesn’t necessarily mean you’re immediately entitled to the deduction.
This makes it important to consider your purchasing plans carefully, particularly if you’re making a significant investment in equipment before the end of the financial year.
A More Predictable Way to Plan Business Investments
The permanent $20,000 threshold gives eligible small businesses greater confidence when budgeting for equipment and other business assets.
Rather than wondering whether the threshold will be extended again next year, businesses can factor the current rules into their longer-term investment and cash-flow planning.
However, the instant asset write-off isn’t a reason to buy something you don’t need simply to reduce your tax bill. A tax deduction only reduces the after-tax cost of an asset — it doesn’t make the purchase free.
Before making a significant purchase, consider whether the asset is genuinely going to benefit your business and whether the timing makes sense for your cash flow.
Thinking About Buying Equipment?
If you’re considering purchasing computers, vehicles, tools, machinery or other equipment for your business, it’s worth understanding how the instant asset write-off could apply before you make the purchase.
We can help you determine whether your business and the asset are eligible, how the deduction may affect your tax position, and whether the timing of the purchase makes sense for your broader financial and cash-flow position.
Planning your purchases before you spend can help you make the most of the available tax rules — without letting the tax deduction drive the decision but before you buy, contact us here at Dymond Foulds & Vaughan to make sure your purchase is eligable.