The instant asset write-off allows eligible Australian small businesses to immediately deduct the full cost of depreciating business assets — bypassing the normal depreciation schedule. In 2026, the $20,000 threshold is permanent for businesses with aggregated annual turnover under $10 million, removing the uncertainty of prior-year temporary extensions. Every eligible asset under $20,000 purchased and first used or installed ready for use by 30 June 2026 qualifies for the full immediate deduction.
2026 Instant Asset Write-Off: The Permanent Rules
- Threshold per asset: Under $20,000 (GST-exclusive if registered for GST)
- Eligible businesses: Aggregated annual turnover under $10 million
- Asset types: New or second-hand depreciating business assets
- Timing: First used or installed ready for use in the 2025-26 income year (by 30 June 2026 for most taxpayers)
- No cap on the number of assets: Multiple qualifying assets assessed individually
How It Works in Practice
Instead of claiming a depreciation deduction spread over the effective life of an asset (3-20 years depending on the asset type), the instant write-off allows the entire cost to be deducted in the year of purchase. A $15,000 piece of equipment that would normally generate a $1,500 annual deduction for 10 years instead generates a $15,000 deduction in a single year — significantly improving cash flow and reducing the current year tax liability.
Strategic Timing Before 30 June 2026
For businesses with forecast taxable income in 2025-26, purchasing qualifying assets before 30 June 2026 and having them installed and ready for use before that date locks in the deduction for the current year. This is particularly effective if you are in a higher income year (e.g., a business that sold assets or had an unusually profitable year) and want to bring forward deductions.
Important: the asset must be first used or installed ready for use by 30 June 2026 — ordering an asset in June but not receiving it until July means the deduction falls in the 2026-27 year.
Assets Specifically Excluded
- Assets not used for any business purpose
- Horticultural plants
- Software developed in-house (different deduction rules apply)
- Assets used to generate assessable income that is subject to a different tax treatment (e.g., capital works under Division 43)
- Certain primary production assets that use accelerated depreciation rules
Frequently Asked Questions
Can I claim the instant write-off on a second-hand asset?
Yes. The instant asset write-off applies to both new and second-hand depreciating assets, provided the asset cost under $20,000 and is used for business purposes. There is no requirement for the asset to be new. This makes the write-off available for purchases at auction, from other businesses, or from online marketplaces like Gumtree or eBay for business equipment.
What if I am not registered for GST — does the $20,000 include GST?
If you are not registered for GST, the $20,000 threshold applies to the total amount you paid including any GST. If you are registered for GST, the threshold is tested against the GST-exclusive cost (since you claim the GST back separately on your BAS). An asset costing $21,450 inclusive of GST = $19,500 ex-GST — this qualifies for a GST-registered business but not for a business that is not registered for GST.
Planning a business equipment purchase before 30 June 2026? Contact AWTS — we advise on the optimal timing and structuring of asset purchases to maximise your tax deduction.