Instant Asset Write-Off
Allows eligible businesses to immediately deduct the full cost of eligible depreciating assets, rather than depreciating over time.
The instant asset write-off allows eligible businesses to immediately deduct the full cost of eligible depreciating assets in the year they are first used or installed ready for use, rather than claiming depreciation over the asset's effective life. For the 2025–26 income year, small businesses (aggregated turnover under $10 million) can instantly write off assets costing less than $20,000 each (subject to legislative confirmation — the threshold has changed multiple times).
Eligible assets include tools, equipment, office furniture, computers, vehicles, and other depreciating assets used in the business. The asset can be new or second-hand. For passenger vehicles, the deduction is capped at the car cost limit ($69,674 for 2025–26), regardless of the actual cost. Assets above the threshold are depreciated using the small business simplified depreciation pool (15% in the first year, 30% thereafter).
The instant asset write-off has been a popular and frequently adjusted policy. The threshold was temporarily increased to $150,000 during COVID-19 (under the enhanced instant asset write-off), and full expensing was available for businesses with turnover under $5 billion from October 2020 to June 2023. Since then, the threshold has returned to $20,000 for small businesses. Always check the current threshold and eligibility, as it has changed almost every budget.