Permanent $20,000 instant asset write-off confirmed in Federal Budget

The Australian Government has locked in the $20,000 instant asset write-off permanently, ending more than a decade of temporary, year-by-year extensions that complicated equipment planning for small businesses nationwide.

Announced as part of the 2026–27 Federal Budget, the measure permanently extends the $20,000 instant asset write-off from 1 July 2026, allowing businesses with turnover up to $10 million to immediately deduct eligible assets costing less than $20,000.

This means eligible business owners can deduct the full cost of assets valued up to $20,000 in the same financial year they are purchased.

Any assets over $20,000 can still be written off, but must be depreciated over several years — at 15 per cent in the first income year and 30 per cent each income year after that, under the small business simplified depreciation rules.

The threshold applies on a per-asset basis, meaning multiple qualifying purchases can be claimed within the same financial year.

The permanent status means small businesses can plan equipment and technology purchases with certainty about the tax treatment, rather than waiting to see whether the measure will be extended in each Budget cycle.

The Government estimates the change will improve cash flow for small businesses by around $890 million over the next five years, while saving small businesses around $32 million per year in compliance costs.

Assets must be first used or installed ready for use on or after 1 July 2026 to fall under the new arrangements.

This article contains general information only. Seek independent financial advice that considers your own circumstances.