Financing business assets around the $20,000 instant asset write-off

Every year, small business owners hear about the instant asset write-off and wonder whether they should buy something before 30 June. For years the threshold changed, expired and was extended at short notice, which made planning difficult. That uncertainty has now eased: the ATO says that the $20,000 instant asset write-off has been permanent since 1 July 2026.

Permanent doesn’t mean you should rush. It means you can plan asset purchases around genuine business needs, with a predictable tax treatment — and choose finance that suits the asset rather than a deadline.

How does the write-off work?

According to the ATO:

• eligible small businesses with an aggregated annual turnover below $10 million can generally deduct the cost straight away
• the $20,000 cap works asset by asset, so several eligible assets can each be claimed as long as each costs less than $20,000
• from 1 July 2026 the threshold is permanent

In plain terms: if your business buys a qualifying asset for less than $20,000 and starts using it, you may be able to deduct the full cost in that year instead of spreading it over several years. Your accountant will confirm eligibility, what counts as an eligible asset, and how GST and business use affect the amount.

What’s the common mistake?

Buying something you don’t need because “it’s tax deductible.” A deduction reduces taxable income; it doesn’t refund the purchase. If your business pays tax at the small business company rate, spending $15,000 on an asset reduces tax by only a portion of that amount — the rest is still cash out the door. The write-off makes a genuine purchase more affordable. It doesn’t make an unnecessary one worthwhile.

How do finance and the write-off interact?

Finance and tax are separate decisions, but they overlap in a few places:

Structure	Who owns the asset	Write-off implications
Pay cash	You	Claim if eligible
Loan or equipment finance where you own the asset	You	Claim may be available if eligible
Lease where the lender owns the asset	Lender	Lease payments may be deductible instead
Line of credit used to buy	You	Claim may be available if eligible

Because the details depend on your entity, the asset and the contract, always confirm with your accountant before signing. Business.gov.au’s guide to leasing or buying equipment sets out the general trade-offs between ownership and leasing.

Which assets do digital businesses commonly buy?

• laptops, desktops and monitors
• servers, storage and networking equipment
• POS terminals, tablets and kitchen display screens
• cameras, lighting and audio gear for content production
• clinical and treatment devices in dental, allied health and beauty
• packing, labelling and warehouse equipment for online stores
• commercial coffee machines and kitchen equipment

Many individual items fall under $20,000, which is why the per-asset rule matters. A full tech refresh made up of many qualifying devices can each be claimed, where eligible. See tech upgrades for how to structure the finance for a mixed upgrade.

How should you finance a mix of assets?

1. Group by lifespan. Durable equipment suits equipment finance over a matching term; short-lived devices suit shorter terms or a line of credit.
2. Keep quotes itemised, so each asset’s cost is clear for both the lender and your tax records.
3. Time purchases with cash flow, not just the end of the financial year.
4. Keep a register with purchase dates, costs and serial numbers.

For sector-specific examples, see dental practices and hospitality with POS. If you’d like help structuring a purchase, send us a quick enquiry.

Does the end of financial year still matter?

Less than it used to for planning, because the threshold no longer disappears. But timing still affects which year a deduction falls in, and an asset generally needs to be acquired and first used or installed ready for use in the year you claim it. Late-June purchases that aren’t delivered or installed until July may fall into the following year. Talk to your accountant well before 30 June if timing matters.

What does an illustrative purchase look like?

A small design studio (illustrative) needs four new workstations at $4,500 each, two large displays at $1,800 each and a network-attached storage unit at $6,000. Each item is under $20,000, so each may be eligible for the instant write-off if the studio’s turnover is under $10 million. The studio funds the purchase through a short equipment loan it owns from day one, keeping cash free for payroll. The accountant confirms eligibility and records each asset separately.

What records should you keep for each asset?

Keep the tax invoice, the date the asset was delivered and first used or installed, the finance contract if there is one, and a note of the business-use percentage if the asset is also used privately. Store them with your accounting records. If a lender later asks for a list of business assets, or the ATO asks about a claim, you’ll have everything in one place.

Ready to equip the business?

If you need equipment or technology and want to keep cash in the business, finance can spread the cost while you take advantage of the tax rules that apply. Start your online enquiry in about 60 seconds — there’s no credit check when you enquire, your details go to one specialist rather than a stack of lenders, and a real person will help match the finance to the assets. Accurate quotes and turnover figures mean we can get the structure right first time.