The $20,000 Instant Asset Write-Off Is Now Permanent
For over a decade, small business owners had to watch the calendar every year, wondering if the instant asset write-off would be extended again. That guessing game is over.
In the 2026–27 Federal Budget, the government confirmed the $20,000 instant asset write-off will become a permanent part of the tax system from 1 July 2026. No more annual renewals, no more last-minute legislation.
What Actually Changed
Until now, this write-off has been extended year by year, almost always announced close to the deadline it was replacing. That uncertainty made it genuinely hard to plan equipment purchases with any confidence.
From 1 July 2026, that uncertainty disappears. Small businesses with turnover under $10 million can immediately deduct the full cost of eligible assets costing less than $20,000, in the same year they buy them, every year, without watching for a renewal announcement.
The government estimates this will save small businesses around $32 million a year in compliance costs, simply by removing the need to track and react to a temporary deadline.
What Counts as an Eligible Asset
The threshold applies per asset, not per business per year. Buy five pieces of equipment at $18,000 each, and you can write off all five in the same income year, provided you’re under the turnover threshold.
Assets must be first used, or installed ready for use, on or after 1 July 2026 to qualify under the new permanent arrangement. Trading stock, land, and assets not used in Australia don’t qualify. Some licensed passenger vehicles may also have their deduction capped under separate car cost limit rules.
What Happens With Assets Over $20,000
If an asset costs $20,000 or more, it doesn’t get the instant write-off. Instead, it goes into the small business simplified depreciation pool.
That pool depreciates at 15% in the first income year, and 30% in each year after that. One useful detail: if the pool balance drops below $20,000 at the end of an income year, you can write off the remaining balance in full at that point.
The Part Worth Flagging Honestly
This measure was announced in the Budget on 12 May 2026, but a budget announcement is not the same as law. It still needs to pass through Parliament before it’s fully locked in.
That doesn’t mean it’s likely to fail — permanent extensions of long-running, broadly supported measures like this one tend to pass. But it’s worth knowing the difference between “announced” and “legislated” before you make a major purchasing decision based on it.
What to Do Before 1 July 2026
Check your eligibility now. Confirm your business turnover sits under the $10 million threshold and that you’re using simplified depreciation rules.
Plan purchases around your actual needs, not the deadline. One genuine benefit of this becoming permanent is that you no longer need to rush a purchase before 30 June just to beat an expiring threshold.
Keep an eye on the legislation passing Parliament. If you’re planning a large purchase specifically to use this measure, check the current status before committing.
Review your existing depreciation pool. If you have older assets sitting in your simplified depreciation pool below $20,000, you may be able to write off the remaining balance.
Frequently Asked Questions
Is the $20,000 instant asset write-off law yet? It was announced in the 2026–27 Federal Budget on 12 May 2026, but still needs to pass Parliament before it’s officially law.
Does the threshold apply per business or per asset? Per asset. You can claim multiple eligible purchases in the same financial year, as long as each one is under $20,000.
What if my asset costs more than $20,000? It goes into the small business simplified depreciation pool instead, depreciated at 15% in the first year and 30% each year after.
Who is eligible? Small businesses with an aggregated turnover of less than $10 million.
Plan Your Purchases With Confidence Talk to Edulink
Understanding what you can claim, and when, makes a real difference to your cash flow and your tax position.
Edulink Payroll Services charges $750 per employee, per year, covering payroll, compliance, and reporting, for small and medium businesses across greater Sydney and Campbelltown.
Have more employees? Call us for a discounted rate.
📞 Call us today: 04 044 71 816
Edulink Payroll Services | Campbelltown & Greater Sydney | Call 04 044 71 816
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