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Tax & equipment · Verified 21 July 2026

Can I still claim the $20,000 instant asset write-off in 2026-27?

Probably, but not certainly. The Government announced in the May 2026 Budget that the $20,000 instant asset write-off becomes permanent from 1 July 2026 for businesses under $10 million turnover. The enabling bill is still before Parliament, so the current legislated default is $1,000. Most advisers expect passage; nothing is guaranteed until royal assent.

Bill status

Not yet law as at 21 July 2026

The permanent $20,000 threshold sits in the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026. Current stage: Second reading, House of Representatives (introduced 25 June 2026). Until it passes, the legislated threshold for 2026-27 is $1,000.

Businesses buying now are relying on announced but unlegislated policy. The 2025-26 year's $20,000 threshold, covering assets first used or installed ready for use by 30 June 2026, is already law and unaffected by this bill.

The mechanics

How the write-off works, plainly

The write-off applies per asset. Buy four machines at $18,000 each and all four are immediately deductible in the same year. There is no annual cap on the number of assets, only a cost ceiling on each one.

The threshold is exclusive of GST where you claim GST credits on the purchase. For a GST-registered business, an asset priced up to $22,000 including GST can still come in under the $20,000 line once the credit is claimed.

Assets costing $20,000 or more are not lost to you at tax time; they go into the small business depreciation pool, deducted at 15 per cent in the first year and 30 per cent of the remaining balance each year after. The deduction arrives over several years instead of one.

Eligibility turns on aggregated turnover under $10 million, which counts the turnover of entities connected with or affiliated to your business, not just your own ABN. The asset must be first used or installed ready for use in the income year you claim it.

Write-off estimator

What is the asset worth at tax time?

$1K$150K

Aggregated turnover

Entity tax rate

First-year tax benefit

$4,500

Immediate deduction

$18,000

At your tax rate

25% company rate

Under $20,000, so the full cost is deductible in the year the asset is first used or installed ready for use. The deduction reduces tax payable at year end; it is not a rebate at purchase.

General information, not tax or financial advice. Figures assume the announced $20,000 threshold is legislated as introduced. Talk to your accountant before relying on any figure here.

The financing angle

You do not need to pay cash to claim it

A chattel mortgage puts the asset on your balance sheet from settlement, so a financed asset is just as eligible for the write-off as one bought outright, provided it is first used or installed ready for use in the income year. The lender holds a security interest; you hold the asset, the depreciation, and the deduction.

That makes the practical play straightforward: keep your working capital in the business, finance the asset over its useful life, and still take the full deduction this year. The tax benefit lands at the same time either way. What changes is whether your cash is sitting in a machine or funding the work the machine was bought for.

Equipment finance up to $5M →Estimate repayments →

Also in the bill

Loss carry-back returns from 1 July 2026

The same bill restores loss carry-back for companies with global income under $1 billion, letting a current-year loss be offset against tax paid up to two years earlier and refunded rather than carried forward. For a business that invested hard in equipment and then hit a rough year, that turns a paper loss into cash back from tax already paid, exactly when cash is scarcest.

FAQ

Write-off questions, answered

Is the $20,000 instant asset write-off law yet?

Not yet, as at 21 July 2026. The permanent $20,000 threshold from 1 July 2026 was announced in the May 2026 Budget and sits in the Treasury Laws Amendment (Tax Reform No. 2) Bill 2026, currently at the Second reading, House of Representatives (introduced 25 June 2026) stage. Until royal assent, the legislated threshold for 2026-27 is $1,000. The 2025-26 year's $20,000 threshold, for assets first used or installed ready for use by 30 June 2026, is already law and unaffected.

Does the write-off apply per asset?

Yes. The threshold applies to each individual asset, so a business can buy several assets costing under $20,000 each and deduct every one of them immediately in the same income year. A $15,000 trailer, a $12,000 compressor, and an $18,000 ute fit-out are three separate immediate deductions, not one combined claim against a single cap.

Do financed assets count?

Yes, provided the finance structure leaves you as the asset owner. Under a chattel mortgage the asset sits on your balance sheet from day one, so it is treated the same as an asset bought with cash: eligible for the write-off in the year it is first used or installed ready for use. Under a lease the lender owns the asset and the treatment differs, so confirm the structure with your accountant before you sign.

What happens if the bill does not pass?

The legislated default of $1,000 stands for 2026-27. Assets over that would go into the small business pool, deducted at 15 per cent in year one and 30 per cent of the remaining balance each year after, so the deduction still arrives, just spread over several years. Parliament could also amend the threshold to a different figure before passing the bill. Nothing is certain until royal assent.

What if my asset costs more than $20,000?

It is not written off immediately. The asset goes into the small business pool and is deducted at 15 per cent in the first year, then 30 per cent of the remaining balance each year after. On a $30,000 asset that is a $4,500 deduction in year one. The full cost is still deductible over time; the write-off only changes how fast it arrives.

Does the $20,000 threshold include GST?

If you are registered for GST and claim the GST credit on the purchase, the threshold applies to the GST-exclusive cost, so an asset priced at $21,500 including GST has a $19,545 cost for write-off purposes and squeezes under. If you are not registered for GST, the GST-inclusive price is your cost. Check your position with your accountant.

Sources

This page is general information, not tax or financial advice. Thresholds and eligibility are set by legislation and can change. Confirm your position with a registered tax agent before relying on any figure here. See our data sources page for every dataset behind this site.

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