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$20,000 instant asset write-off made permanent from 1 July 2026 for small businesses under $10m turnover, removing annual policy uncertainty.
Immediate full deduction per asset under $20,000 (new or second-hand) if installed and ready for use in the income year.
Assets above $20,000 go into simplified depreciation (15% first year, 30% thereafter), with specific exclusions still applying.
Foreign-owned subsidiaries in scope may benefit, with impact driven more by timing certainty than major tax savings.ed subsidiaries in scope may benefit, with impact driven more by timing certainty than major tax savings.
Australia will permanently adopt the $20,000 instant asset write-off from 1 July 2026, ending years of temporary extensions for small businesses with turnover below $10 million.
The measure allows eligible businesses to immediately deduct the full cost of qualifying assets costing less than $20,000 in the year they are first used or installed ready for use. It replaces the prior pattern of temporary extensions and annual threshold adjustments. The permanent arrangement removes the recurring policy uncertainty that previously surrounded the incentive’s renewal.
The threshold applies per asset, not per year, and includes both new and second-hand equipment. Assets must be operational within the income year to qualify. Certain exclusions remain, including assets already claimed under the Research and Development Tax Incentive and specific categories of in-house software and primary production equipment subject to separate regimes.
Assets above the threshold will continue to be depreciated through the small business simplified depreciation pool, with a 15% deduction in the first year and 30% thereafter. ABN Australia’s Managing Director, Aaron Garry, said that the change provides long-term certainty for capital investment planning amongst smaller enterprises, including foreign-owned subsidiaries.
The write-off forms part of a broader suite of small-business tax and investment measures in the Federal Budget, including expanded loss carry-back provisions for larger turnover thresholds and staged reforms to start-up loss treatment and venture capital settings over the coming years.
Tax advisers from ABN Australia expect the direct financial impact on most large operations to be limited, but the certainty effect may accelerate timing decisions on lower-value capital expenditure, particularly for office fit-outs, equipment upgrades, and incremental business expansion purchases.
Foreign-owned subsidiaries operating in Australia under the $10 million turnover threshold are eligible to access the measure, subject to standard Australian Taxation Office compliance requirements.
Last updated: 15th May 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.
Ro Elvinia
Customer Success and Marketing Manager