If you have ever scrambled in June to work out whether a purchase would be deductible before the cut-off, this year is different, and for once in a useful way.
For about a decade the $20,000 instant asset write-off has been handed out a year at a time. The threshold moved, the deadline loomed, and every financial year owners were left guessing whether to bring a purchase forward or risk losing the benefit. It made planning equipment spend harder than it needed to be.
In the 2026-27 Federal Budget, handed down on 12 May 2026, the Government announced it intends to make the $20,000 write-off permanent for small businesses from 1 July 2026. If that holds, the annual guessing game is over.
One caution worth stating plainly, because some commentary has run ahead of it: as things stand, this is an announced measure, not yet passed into law. The intent is clear and it is widely expected to go through, but until it does, treat permanent as the plan rather than a locked-in fact. We are watching the legislation and will tell you when it is settled.
If your business has an aggregated turnover under $10 million, you can immediately deduct the full cost of an eligible asset under $20,000, in the year you first use it or have it installed ready for use.
The $20,000 is per asset, not per year. Replacing a run of tools, kitting out a new crew, picking up a light commercial vehicle, you can write off several qualifying assets in the same year, not just one.
Assets of $20,000 or more do not miss out. They go into the simplified depreciation pool, written off at 15% in the first year and 30% after that, with the whole balance deductible if the pool sits under $20,000 at year end.
The point of a permanent threshold is not a bigger deduction. The number is the same. What changes is that you no longer have to make equipment decisions against a 30 June clock.
That is worth more than it sounds. The right way to buy gear is when the business needs it and the cash flow suits it, not because a deadline is closing. Buying equipment you do not need to save tax was always a poor trade. With the deadline pressure easing, there is less reason to ever make that mistake. Map your likely capital spend across the year, time it to your cash position, and let the deduction follow the decision rather than drive it.
A deduction is not a discount. Writing off an asset lowers your taxable income, it does not refund the purchase price. The value is in timing the deduction well, which frees up cash sooner. That logic still holds, deadline or no deadline.
It is also worth checking that your business actually sits under the $10 million line. Aggregated turnover includes connected entities and affiliates, so the real figure can be higher than one company’s revenue suggests. If you are near the threshold or you run more than one entity, that is worth confirming before you rely on it.
If you are planning a significant purchase this year, or you are not certain whether your group sits under the threshold or how a purchase should be structured, that is a short conversation worth having before you commit.
Book a consultation with the Xact team and we will work through what applies to your business.
