The $20,000 instant asset write-off is now permanent

The $20,000 instant asset write-off is no longer a year-by-year extension. From 1 July 2026 it is permanent for small businesses, and the ATO lists the measure as law.

Who can use it

• Small businesses with an aggregated turnover of less than $10 million.
• You must use the simplified depreciation rules to claim it.
• The asset must cost less than $20,000 and be first used or installed ready for use in the income year you claim it.

How the limit works

The limit applies per asset, so you can write off several assets in the same year as long as each one costs less than $20,000. It covers new and second-hand assets.

The test is the full cost of the asset, not your business share of it. If an asset is used partly for private purposes, you claim only the business portion, but the whole cost must still be under the limit.

An asset that costs $20,000 or more goes into the small business pool instead. The pool depreciates at 15% in the first year and 30% each year after that.

Vehicles

A new work ute is a common purchase for a trade business. If the vehicle costs $20,000 or more, it cannot be written off instantly and goes into the pool. A separate car limit applies to passenger vehicles designed to carry fewer than 9 passengers and a load of less than one tonne. Check the vehicle before you buy if the tax treatment matters to the decision.

What to do now

• Keep the invoice and the date each asset was first used or installed ready for use.
• Talk to us before you buy a large asset, so you know which year the deduction falls in.
• Remember a deduction reduces taxable income. It is not the same as getting the purchase price back.