The $20,000 instant asset write-off is permanent: how to plan equipment purchases without property

What changed on 1 July 2026?

For several years the $20,000 write-off lived on annual extensions, sometimes announced only weeks before 30 June, so owners had to guess whether it would still be there when their equipment arrived. That uncertainty is gone. In September 2026 the ATO’s small business newsroom confirmed the threshold is now ongoing from 1 July 2026, so owners can plan purchases without waiting for a Budget announcement.

It applies to businesses with aggregated annual turnover of less than $10 million. For most of the owners who read this site (renters, tenants and businesses without property to borrow against), that covers them.

This guide explains how the write-off works in practice, the details that commonly trip people up, and how to pay for the equipment itself without putting up property. For tax advice specific to your business, your accountant is the right person; what follows is general.

How does the write-off work?

The ATO explains that eligible businesses can claim an immediate deduction for the business portion of the cost of an asset in the year the asset is first used or installed ready for use. Instead of depreciating the asset over several years, the business portion of the cost is deducted in one go.

The key rules, drawn from the ATO’s guidance:

Rule	What it means in practice
Per-asset limit	Each individual asset must cost less than $20,000. Several assets can each be written off.
GST treatment	If you’re GST-registered and can claim a full GST credit, the cost excludes GST.
Timing	The deduction is in the year the asset is first used or installed ready for use.
Simplified depreciation	Small businesses need to apply the simplified depreciation rules to claim it.
Assets at or over the limit	Under simplified depreciation, they go into the small business pool instead.
Business portion only	Private use reduces the deductible amount.

Which details trip people up?

“Less than” means less than. The limit applies to assets costing less than $20,000. An asset costing exactly $20,000 doesn’t qualify for the instant write-off; under simplified depreciation it goes into the small business pool.

GST inclusive or exclusive? For a GST-registered business that can claim a full GST credit, the cost is measured excluding GST. A machine priced at $21,450 including GST costs $19,500 excluding GST, which is under the limit. For a business that isn’t registered for GST, the full price counts.

Ordered isn’t the same as installed. The write-off is claimed in the year the asset is first used or installed ready for use. An oven ordered in June but installed in July falls into the next income year.

One asset, not one invoice. The threshold is per asset. Splitting an invoice for a single machine into two doesn’t make it two assets.

Private use. A vehicle used partly for personal trips can only be written off for its business-use portion.

Does financing change anything?

The write-off relates to the cost of an asset your business holds and uses, and paying with finance doesn’t automatically rule it out. But the structure matters:

• With loan-style equipment finance (often called a chattel mortgage), you generally own the asset from the start, with the financier holding security until it’s paid off.
• With a lease, the financier usually owns the asset and you pay to use it, which is treated differently for tax.

business.gov.au frames the basic choice as leasing, where you rent equipment from a company that owns it, versus buying, where you pay for and own it, possibly with a loan. Because the tax outcome depends on the structure, talk to your accountant before choosing, particularly near the end of the financial year.

If you’d like to understand which finance structures are available for the equipment you have in mind, start a quick enquiry and a specialist will walk you through them.

Why is equipment finance so useful without property?

Because the equipment secures itself. The Personal Property Securities Register, which AFSA operates, is where lenders record their interest in assets like vehicles and machinery so anyone can search it. When you finance equipment, the financier usually registers its interest over that specific asset. It doesn’t need your house, and it doesn’t need a general claim over everything the business owns.

That has two big advantages for owners without property:

1. Earlier access. Newer businesses can often get equipment finance before they qualify for larger unsecured working capital, because the asset reduces the lender’s risk.
2. Preserved capacity. Putting equipment on equipment finance leaves your unsecured borrowing power, sized on turnover, free for wages, stock and cash-flow gaps.

Our page on equipment finance explains the structures and what to check. Our funding ladder guide shows where equipment fits in a longer plan.

How should you plan purchases around the write-off?

The permanence of the write-off removes the end-of-year rush. You no longer need to squeeze purchases into June in case the threshold disappears. That makes it easier to buy equipment when the business actually needs it.

A sensible approach:

1. List the equipment you’ll need in the next 12 months, with approximate costs.
2. Mark each item as under or over the limit, remembering GST treatment.
3. Time purchases to need, not to the tax year. The write-off will still be there.
4. Group items that must be installed together, so they’re ready for use in the same period.
5. Choose a finance structure with your accountant’s input.
6. Keep invoices and installation dates, since timing determines the income year.

A worked example (illustrative)

Picture a hypothetical café in a leased shop, GST-registered, with turnover well under $10 million. The owner plans three purchases this year:

Item	Price incl. GST	Cost excl. GST	Under the limit?
Commercial espresso machine	$19,800	$18,000	Yes
Coffee grinder	$3,960	$3,600	Yes
Combi oven	$26,400	$24,000	No (small business pool)

The espresso machine and grinder could each qualify for the instant write-off in the year they’re installed ready for use. The combi oven costs more than the limit, so under simplified depreciation it goes into the small business pool. All three could be funded with equipment finance, secured by the equipment itself, leaving the café’s unsecured capacity free for a quiet winter. The figures are illustrative; the café’s accountant would confirm the tax treatment.

What about fit-outs?

Some removable fit-out items, such as fridges, ovens and furniture, may be separate assets that can each be written off if they cost less than the limit. Built-in improvements like joinery, partitions and wiring are treated differently. For a tenant, the practical funding split is usually equipment finance for removable items and an unsecured loan for built-in work. Our page on fit-outs for tenants goes into detail.

Should the write-off drive the decision to buy?

No. A tax deduction reduces the cost of something you needed anyway; it doesn’t make an unnecessary purchase worthwhile. The best equipment purchases lift capacity, cut costs or open new revenue. The write-off is a welcome bonus on top.

Buy the gear, keep the house out of it

With the $20,000 write-off now permanent, you can buy equipment when the business needs it. We can help you fund it in a way that doesn’t touch property.

Enquiring leaves your credit file alone. We don’t send your details out to a list of lenders; one specialist looks at the equipment, your turnover and the right structure. Please describe the equipment accurately on the form (new or used, dealer or private, approximate cost) because those details decide which financier and structure fit. See what you qualify for.