Instant Asset Write-Off Extended to 30 June 2025

What is the Instant Asset Write-Off?

The instant asset write-off allows eligible businesses to immediately deduct the business portion of the cost of an asset in the year it is first used or installed ready for use. It is designed to encourage investment in machinery and equipment that supports business growth and profitability.

Eligible businesses can use the write-off for:

• New and second-hand assets
• Multiple assets, provided the cost of each individual asset is less than the relevant threshold

Who is Eligible?

To claim the instant asset write-off:

• Your business must apply the simplified depreciation rules
• The asset must not be excluded under those rules

Eligibility criteria and thresholds can vary depending on:

• Your aggregated turnover (including the turnover of connected or affiliated entities)
• When the asset was purchased
• When it was first used or installed ready for use
• The cost of the asset, which must be below the relevant threshold

$20,000 Threshold for 2024–25

To qualify for the $20,000 instant asset write-off during the 2024–25 income year, your business must:

• Have an aggregated turnover of less than $10 million
• Use the simplified depreciation rules
• Acquire and first use (or install ready for use) the asset between 1 July 2024 and 30 June 2025

Importantly, the $20,000 limit applies per asset, so businesses can immediately write off multiple assets under the threshold.

Assets Over $20,000

Assets valued above $20,000 can still be depreciated under the small business simplified depreciation pool, with:

• 15% depreciation in the first year
• 30% each year thereafter

If the pool balance is under $20,000 at the end of the 2024–25 income year, it can also be fully written off.

What Assets Are Eligible?

The simplified depreciation rules generally apply to most depreciating assets used in your business, including:

• Office furniture and equipment
• Computers and IT hardware
• Tools, vehicles, and machinery such as tractors

However, the instant asset write-off does not apply to:

• Assets leased out more than 50% of the time on a depreciating asset lease
• Horticultural plants (including grapevines)
• Software allocated to a software development pool
• Assets used in research and development (R&D) activities
• Capital works, such as buildings and structural improvements

Conclusion

The extension of the $20,000 instant asset write-off provides a valuable opportunity for small businesses to invest in growth while benefiting from immediate tax deductions. With the deadline set for 30 June 2025, now is a great time to review your asset needs and take advantage of the available incentives.