Instant Asset Write-Off Extended to 30 June 2026: What It Means for Your Small Business Tax Deduction

If you have been considering upgrades, the extension creates valuable breathing room for smarter tax planning before the next 30 June deadline.

This guide breaks down how the instant asset write-off works, who is eligible, and what it really means for your business. You will learn how to maximise your deduction, avoid common mistakes, and confidently prepare for the upcoming financial year.

The $20,000 instant asset write-off allows Australian small businesses to immediately deduct the cost of eligible depreciating assets rather than claiming depreciation over several years. In simple terms, it lets you reduce your taxable income faster when purchasing business assets for business purposes.

Under current rules, the measure has been extended to 30 June 2026, giving operators additional time to act. The policy, first expanded during economic recovery measures after June 2023, continues to support small businesses by encouraging investment that strengthens financial systems and long-term productivity.

To qualify, the asset must be first used or installed, ready for use, before the end of the financial year. That means the equipment cannot just be ordered or invoiced. It needs to be operational within the relevant income year so the immediate tax deduction can apply.

Many business entities can access the initiative, but there are clear thresholds. Generally, eligible businesses must have an aggregated turnover of less than $10 million. This ensures the benefit targets growing operators rather than large corporations.

If your company has a turnover below the threshold and is registered for GST, you may be eligible for the instant concession. The rules typically apply from 1 July at the start of the financial year, including the period ending 30 June 2026.

Always confirm your business situation with a qualified tax adviser before lodging a claim. Eligibility can vary based on structure, ownership, and intended use of the asset.

Most eligible assets fall under the category of eligible depreciating assets costing less than the prescribed limit. These may include vehicles, machinery, office technology, or specialised tools required for day-to-day operations. It also covers second-hand assets and improvements to existing assets.

The threshold applies per asset, meaning the cost of the asset must sit below the cap for each individual asset. It is not a combined limit, so operators can write off assets costing less than the threshold across multiple assets if each item qualifies.

Importantly, the deduction applies to the business portion of the cost only. If equipment is used privately, you can claim the relevant percentage tied to work activity.

Traditional depreciation spreads the entire cost of the asset across several years. While that approach still works for larger purchases, the instant write-off enables businesses to claim the full cost of eligible depreciating items sooner.

If an item exceeds the threshold, it may be placed into the small business pool, often referred to as the small business depreciation pool or business simplified depreciation pool. From there, deductions are calculated at a set rate in the subsequent year.

The instant asset write is designed to simplify compliance. Instead of tracking the asset over time, businesses can recognise the expense in the year in which the asset is purchased and operational.

Effective tax planning is increasingly important as the 12 months until 30 June quickly become just months until 30 June 2026. Leaving purchases until the last minute risks missing the deadline.

For example, assets acquired between 1 July 2025 and 30 June 2026 must still be ready for use before the cut-off. If delivery delays push installation past the date, the claim shifts to the next income year and 30 June cycle.

Smart preparation helps manage cash flow and your expected tax bill. When used strategically, the tax write-off can improve liquidity while supporting growth.

The measure was effectively extended for another year through 2026, ensuring continued support for small businesses navigating higher costs and evolving markets. For many owners, this certainty is just as valuable as the deduction itself.

The extension until 30 June 2026 provides business owners with a predictable window to make asset purchases that enhance efficiency and competitiveness. It also signals confidence in the resilience of Australian enterprise.

Ultimately, the policy is about strengthening financial outcomes by encouraging reinvestment back into operations.

Timing is everything. To claim the instant benefit, the equipment must be installed and ready for use by the end of the financial year.

The asset is first used when it becomes operational, not when you sign the contract. Businesses often overlook this detail, especially when ordering customised equipment with long lead times.

As the 2026 deadline approaches, suppliers can become busier. Acting early helps ensure you can use it by 30 June without unnecessary stress.

Yes. Provided each purchase meets the criteria, businesses can instantly write off eligible items. The threshold applies per asset, so operators may write off multiple assets without breaching the limit.

This is particularly helpful for companies upgrading multiple systems simultaneously, such as replacing computers while also investing in vehicles. The ability to instantly write the full cost of eligible equipment supports scalable growth.

Remember that the rule relates to the cost of eligible assets, not the combined invoice total.

The write-off sits within the broader asset under the simplified depreciation framework. Assets above the limit are transferred into the small business pool, where deductions are calculated annually.

If the asset was written off immediately, you will not be able to claim it later. However, assets moved into the pool remain deductible over time.

Understanding how this interacts with your first income year and 30 June reporting obligations can prevent accounting headaches.

Start by reviewing planned purchases ahead of 30 June 2026. This ensures you capture the right timing for claims.

Check whether items are eligible as depreciating assets, confirm they cost less than the threshold, and ensure the assets genuinely support revenue generation.

Most importantly, seek guidance tailored to your circumstances. While the instant asset write-off creates opportunity, the right strategy depends on your structure, growth plans, and cash position.

• The instant asset write-off has been extended to 30 June 2026, giving operators more time to invest.
• Businesses with an aggregated turnover below the threshold may qualify.
• The concession allows you to immediately write off the cost of eligible equipment rather than spreading the deduction.
• The rule applies on a per-asset basis, allowing companies to upgrade multiple tools at once.
• Assets must be operational before the deadline to be claimed in the correct income year.
• Early planning reduces risk and helps manage your tax bill.
• Always confirm eligibility and strategy with a professional adviser.

If you are considering upgrades, the next 30 June is closer than it appears. Acting decisively can help you capture the benefits while positioning your small business for sustainable growth.

A Moula loan is one solution that can help businesses get the finance they need to take full advantage of the instant asset write-off in 2026.

Take a look at our business loan calculator for an estimate of total interest and repayments for a range of loan amounts.