Extension of instant asset write off
Jessie Nippers • April 7, 2026
The Federal Government has once again extended the $20,000 instant asset write-off, providing continued support for small businesses looking to invest and grow.
Under the latest legislation, eligible businesses can access the $20,000 threshold for assets first used or installed ready for use between 1 July 2025 and 30 June 2026.
This extension means businesses can continue to immediately deduct the full cost of qualifying assets, rather than depreciating them over several years.
How the write-off works
The instant asset write-off allows small businesses with an aggregated turnover of less than $10 million to claim an immediate deduction for assets costing less than $20,000 (excluding GST). The threshold applies on a per-asset basis, meaning multiple assets can be written off, provided each individual item is under the limit.
Eligible assets can include tools, equipment, vehicles (subject to other limits), and office technology. Both new and second-hand assets may qualify, provided they are used for a business purpose.
A critical point often missed is timing. It’s not enough to purchase an asset before 30 June—it must be installed and ready for use by that date to qualify for the deduction.
What happens to assets that are above $20,000?
If an asset exceeds the $20,000 threshold, it cannot be immediately written off in full. Instead, it is allocated to the small business general depreciation pool and depreciated over time.
Under current rules, assets in this pool are typically depreciated at 15% in the first year and 30% in each subsequent year (on a diminishing value basis). This means the tax deduction is spread across multiple years rather than claimed upfront.
Why the extension matters
This measure continues to deliver meaningful cash flow benefits. By bringing forward deductions, businesses can reduce taxable income in the current year, freeing up funds for reinvestment or day-to-day operations.
However, the extension is temporary. From 1 July 2026, the threshold may revert back to just $1,000 unless further legislation is passed.
This ongoing uncertainty makes forward planning essential so talk to your accountant today to plan ahead.
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