$20,000 instant asset write-off for 2025–26: What Small Businesses Need to Know

If you’re a small business owner planning to invest in equipment or assets, the instant asset write-off (IAWO) could provide a valuable tax benefit this year.

Who can use it?

Businesses with an aggregated annual turnover under $10 million may be eligible to claim the instant asset write-off.

What can you claim?

You may be able to immediately deduct the business portion of eligible assets costing less than $20,000.

Key points:

• The $20,000 threshold applies per asset, meaning multiple assets can be written off

• Assets must be first used or installed ready for use between 1 July 2025 and 30 June 2026

• Both new and second-hand assets can qualify

• Some exclusions and limits apply

Improvements to existing assets

If you’ve previously claimed a deduction on an asset under simplified depreciation rules, you may also be able to instantly deduct the first improvement cost for that asset — provided:

• The improvement cost is under $20,000, and

• It was incurred between 1 July 2025 and 30 June 2026

What about assets over $20,000?

Assets costing $20,000 or more can still be claimed through the small business depreciation pool, which allows:

• 15% deduction in the first year

• 30% deduction in each following year

  
  

Don’t forget record-keeping

As always, standard deduction rules apply. Good record-keeping is essential to:

• Substantiate your claim

• Ensure accuracy

• Support your position if reviewed

Planning a purchase?

Timing and eligibility matter. If you’re considering asset purchases this year, we’re happy to help you maximise the available tax benefits and ensure you meet the requirements.

Speak to your Client Manager for more information.