ATO makes $20,000 instant asset write-off permanent

Small foreign-owned businesses operating in Australia can continue claiming immediate deductions for eligible assets costing less than $20,000, following the ATO’s confirmation that the write-off is permanent. 

The ATO confirmed this September that the $20,000 instant asset write-off (IAWO) is permanent from 1 July 2026. The measure applies to eligible small businesses with aggregated annual turnover below $10 million. Businesses can claim an immediate deduction for the business portion of eligible depreciating assets when they are first used, or installed ready for use, in an income year. 

The $20,000 limit applies to each asset, allowing businesses to claim immediate deductions for multiple eligible assets. Eligible improvements or upgrades to existing assets may also qualify where the cost is below $20,000. In most cases, both new and second-hand assets are eligible, although some exclusions and limits apply. 

The ATO also confirmed that the low-value pool threshold increased from $1,000 to $20,000 from 1 July 2026. Assets costing $20,000 or more that cannot be immediately deducted can continue to be added to the small business pool and depreciated at 15% in the first income year and 30% in each subsequent income year. 

Businesses that previously chose not to use the simplified depreciation rules can re-enter the regime until 30 June 2027 without waiting for the usual five-year lock-out period. 

To claim the IAWO, businesses must include the deduction in their tax return for the income year when the asset was first used or installed ready for use. They must also keep records supporting the claim.

Last updated: 9th Sept 2026

About the Author

Ro Elvinia is ABN Australia's Customer Success and Marketing Manager. She holds a bachelor’s degree in mass communication, majoring in journalism, and also has an academic background in civil engineering. With over a decade of experience in professional writing and a background spanning journalism, Australian immigration, and business services, Ro brings a unique mix of communication and analytical expertise. She works closely with international clients and contributes to ABN Australia's content strategy, helping global businesses stay informed and confident as they navigate the Australian market.