Instant Asset Write-Off Extended to 30 June 2026 – What It Means for Small Businesses

Good news for small business owners: the $20,000 instant asset write-off has now been extended for another year. This means you can continue to immediately deduct the full cost of eligible business assets, helping reduce your tax bill while upgrading the tools, equipment, or technology your business needs to grow.

The extension applies to businesses with an annual turnover under $10 million, for assets first used or installed ready for use on or before 30 June 2026. Whether you’re a tradesperson, café owner, or professional services provider, this is a simple and effective way to invest in your business while boosting cash flow.

Key Points for Small Businesses Owners

• Threshold per asset: Each asset costing less than $20,000 qualifies individually. You can claim multiple assets in the same year if each meets the limit.

• GST considerations: The $20,000 threshold is GST-exclusive for registered businesses and GST-inclusive for unregistered businesses.

• First used or installed requirement: Assets must be installed and ready for use by 30 June 2026. Simply ordering or paying for an asset in advance is not enough.

• Trade-ins: The deduction is based on the full purchase price, not reduced by trade-ins or expected resale value.

This deduction applies to assets acquired and first used or installed for a taxable purpose between 1 July 2025 and 30 June 2026, providing a simple way to reduce taxable income in the year of purchase.

Financing and Cash Flow Considerations

Investing in new assets doesn’t have to drain your cash reserves. Many businesses choose to finance assets through options like:

• Chattel Mortgages
• Lease Arrangements

These options allow you to claim the instant asset write-off without upfront payments, and can be tailored to match your cash flow and business needs. Each option carries different tax and depreciation implications, so it’s essential to choose the right structure with guidance from your advisor.

Strategic Planning is Key

The instant asset write-off is a valuable incentive, but it works best when asset purchases align with your broader business goals and cash flow. A well-timed acquisition can reduce your taxable income and free up funds for reinvestment, while poor planning could strain your finances.

Now is the time to:

• Confirm your eligibility with the guidance of your Morrows advisor
• Evaluate the benefits of purchasing outright versus financing
• Review cash flow and financing options to ensure smooth implementation
• Identify which assets you need to purchase in the 2025-26 financial year
• Schedule delivery and installation so assets are ready for use before 30 June 2026
• Ensure compliance with timing and recordkeeping requirements

Your Morrows advisor can help you:

• Confirm which assets are eligible
• Decide whether to purchase or finance
• Stay compliant with tax and recordkeeping obligations

Acting early ensures your business fully benefits from the deduction while continuing to invest in growth.

Let’s Talk

Unsure if an asset write-off strategy is right for your business this year? Our team provides tailored advice based on your industry, business size, and goals.

Contact your Morrows advisor today to schedule a planning session. Don’t wait until June 30 – start planning early.

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