Updated: April 2026

The Instant Asset Write-Off is one of the most popular tax concessions for small businesses in Australia. If you need to buy new equipment, computers, or tools for your business, understanding how this rule works can significantly reduce your tax bill at the end of the financial year.

1. What is the Instant Asset Write-Off?

Normally, when you buy a large business asset (like a $15,000 coffee machine or a $10,000 commercial printer), you cannot deduct the full cost from your tax return in the year you buy it. Instead, you have to slowly claim the cost over several years as the asset depreciates.

The Instant Asset Write-Off allows eligible businesses to bypass this process and claim an immediate, full tax deduction for the business portion of an asset in the same year it was purchased.

2. Who is eligible?

To be eligible for the current concession, your business must have an aggregated annual turnover of less than $10 million. If you meet this criteria, you can use the write-off for both new and second-hand assets.

3. How does the $20,000 limit work?

The key to this concession is that the $20,000 threshold applies on a per-asset basis, not as a total combined limit. This means you can purchase multiple individual assets and claim the immediate deduction for each one, as long as the cost of each individual asset is less than $20,000.

Note: If your business is registered for GST, the $20,000 threshold is calculated exclusive of GST. If you are not registered for GST, the threshold includes GST.

Planning a large purchase?

Before you rush out to make end-of-year purchases just for the tax deduction, it is crucial to ensure it makes sense for your cash flow. Remember, a tax deduction is not a free purchase—you still have to spend the cash!

Next Steps: If an asset costs $20,000 or more, it must be placed into a small business pool and depreciated. Contact Loyal Bright Accountants today, and we can help you plan your asset purchases to maximize your tax savings safely.