What is the instant asset write-off?
Metadata
| Field | Value |
|---|---|
| Title | What is the instant asset write-off? |
| Author | Simon Jones |
| Site | Reckon |
| Published | 2026-07-06 |
| Words | ~1200 |
| Language | en |
| URL | https://www.reckon.com/au/small-business-resources/end-of-financial-year/what-is-how-instant-asset-write-off-work/ |
한국어 요약 (Korean Summary)
중요 — 4개 소스 간 확정 여부 불일치, 이 소스가 2026-07-06자 최신: 이 글은 “20,000 한도는 **임시(temporary) 조치**이며, **2026-07-01부로 한도가 1,000로 되돌아간다(연장되지 않는 한)**“고 명확히 서술 — 앞서 클리핑한 Prospa(2026-05-20, “영구 확정”)·Brother(2026-05-10, “영구화 예정”)와 정면으로 배치되고, Scale Suite(2026-07, “법안 미통과·임시 1,000 적용 중")·CommBank("미확정, 제안된 변경사항으로 취급")과는 일치한다. 발행일 기준으로는 이 Reckon 글(7/6)이 Prospa/Brother(5월)보다 최신이라, **7월까지도 법안이 통과되지 않았을 가능성**을 시사 — `/ingest` 시 4개 세제 소스 모두를 하나의 disputed 클러스터로 묶어 ATO 1차 소스 확인 후 최종 판단 필요. 그 외: 자산당(GST등록 시 GST제외) 20,000 미만, 통합매출 1,000만 미만, 신품·중고 자산 모두 가능, 승용차는 별도 한도(69,674) 적용, trade-in 시 새 자산의 총 가격 기준으로 판정(트레이드인 차감 후 금액 아님), 2023-06-30 종료된 한도 없는 “temporary full expensing” 제도와의 구분.
Original Content
What is the instant asset write-off?
Key Takeaways (TL;DR)
- Eligible small businesses can immediately deduct assets costing under $20,000 in the year they are first used or ready for use.
- The write-off applies only to businesses with aggregated turnover below $10 million and assets used for a taxable business purpose.
- Assets costing $20,000 or more must be depreciated through the small business pool, not written off instantly.
The instant asset write-off is a tax incentive from the Australian government that lets small businesses claim an immediate tax deduction for certain assets. Instead of claiming depreciation over several years, you can immediately write off the full cost on your tax return.
How does instant asset write-off work?
It lets businesses instantly deduct the entire cost of an eligible depreciating asset in the income year when it’s first used or installed ready for use. For 2025–26, businesses with an aggregated turnover of less than 10 million can claim the instant asset write-off for eligible depreciating assets costing less than 20,000 each. Assets costing $20,000 or more can’t be immediately written off — instead, you place their business portion into the small business pool, depreciated at 15% in the first income year and 30% after.
Hot tip: The asset must be first used or installed ready for use for a taxable purpose between 1 July 2025 and 30 June 2026.
What eligible assets can you claim?
- Tools, trade equipment and plant machinery
- Computers, laptops and IT equipment
- Office furniture, such as desks, chairs, and shelving
- Vehicles including vans, utes and cars (subject to the car limit)
- Kitchen equipment, such as coffee machines, for business premises
- Digital products and software used in business operations
You can’t claim assets on a depreciating asset lease, horticultural plants, or capital works.
Who can use the instant asset write-off?
Any small business that meets the eligibility criteria can claim it – sole traders, partnerships, companies and trusts across all industries. You must have an aggregated annual turnover of less than $10 million and apply the simplified depreciation rules for the relevant financial year. Both new and second-hand assets qualify. The asset must be operational by 30 June to be claimed on that year’s tax return.
How much is the instant asset write-off?
The current threshold for the 20,000 instant asset write-off is 20,000 per asset. This is a temporary measure – on 1 July 2026, the threshold returns to $1,000 unless it’s extended again.
For passenger vehicles, the car limit applies, currently $69,674. Even if a motor vehicle costs more, you can only use the car limit amount as the depreciating asset cost for tax purposes.
What if you use an asset for business and private purposes?
If an asset is used for both business and private use, you can only claim the taxable purpose portion. The entire cost of the asset still has to be under $20,000 – not just the business portion.
What happened to temporary full expensing?
The temporary full expensing scheme ended on 30 June 2023. Under that scheme, there was no cost limit. Since 1 July 2023, the instant asset write-off rules apply with the $20,000 threshold.
How do trade-ins and improvements work?
If you trade in an old asset, the total cost of the new asset determines eligibility – not the out-of-pocket amount after the trade. If the new asset costs 20,000 or more, it goes into the small business pool regardless of what you paid after the trade-in. You can also claim an instant deduction for the second element cost of an asset already written off in a prior year, so long as the improvement cost is under 20,000.
How do you apply and record the instant asset write-off?
You claim the instant asset write-off on your tax return for the relevant financial year. Keep good records, including the purchase date, total cost, taxable purpose portion, and more.