LEARN · INSTANT ASSET WRITE-OFF

Instant Asset Write-off — current threshold and eligibility

The Instant Asset Write-off (IAWO) lets eligible small businesses claim an immediate deduction for the full cost of a depreciating asset. The current threshold is $20,000 per asset for small-business entities (aggregated turnover under $10M), in place since 1 July 2023 and extended through 30 June 2026 by the Treasury Laws Amendment (Tax Incentives) Act 2024. The threshold has previously sat at $1,000 (default), $30,000 (2019–2020) and $150,000 (COVID stimulus 2020–2021) — what applies to a specific purchase depends on the asset's installation date, not the order date.

1. Who's eligible

Small business entities — aggregated turnover under $10 million — using the simplified depreciation rules. The asset must be installed and ready for use in the year claimed. Both new and second-hand assets qualify, and the combination of vehicles, plant, computers, tools, furniture and fit-out can all be written off provided each is under the per-asset threshold.

2. How the threshold works

The threshold applies per asset, not per year — a small business can write off any number of assets each year provided each is under the threshold. Above-threshold purchases go into the simplified depreciation pool at the standard rates instead.

3. Vehicle limit

Cars are capped at the luxury car limit even when the IAWO threshold would otherwise allow more — about $69,674 in 2025-26. The cap also applies for GST and depreciation generally. Commercial vehicles (one-tonne utes, vans designed for carrying goods) are not subject to the car limit.

4. Timing rules

Eligibility depends on the date the asset is first used or installed ready for use, not the order date. Buying gear in late June 2026 but not commissioning it until July puts it in the next financial year — sometimes a planning lever, sometimes a trap.

5. Common mistakes

  · Claiming for an asset bought before the entity became GST-registered or before the SBE eligibility started
  · Forgetting the car limit applies even when the cost is under the IAWO threshold
  · Not adjusting for private use — the deduction is restricted to the business-use percentage
  · Claiming an asset that's still in transit at year end — installed-and-ready-for-use is the test
  · Mixing trading stock with depreciating assets — different rules apply

6. When to talk to us

Before any large equipment purchase late in the financial year — a planning conversation in May or June often saves $1,000+ in tax. We model the IAWO impact, the cashflow and the GST treatment together so you know the after-tax cost of the asset before signing the order.

LAST REVIEWED · 2026-05 · BY ZAKI CHOUDHRY · TAN 26321143