Instant asset write-off: what's changing this year

The instant asset write-off is one of the few tax measures small business owners actually look forward to. It can change the maths on a piece of equipment, sometimes meaningfully. But the rules around it shift from year to year, and acting on last year's understanding is an easy way to get caught out.

Here's how the mechanism works in general terms, and what to check before you buy. As always, confirm the specifics with your accountant — they're the only person who can apply the rules to your actual numbers.

How the write-off works

Normally, when a business buys an asset, it claims the cost gradually over several years through depreciation. The instant asset write-off lets eligible businesses claim the full cost of an eligible asset in the year it's first used or installed ready for use, up to a set threshold per asset. The effect is to bring a deduction forward rather than spreading it out — useful in a year where the deduction is worth more to you.

The write-off changes when you get the deduction, not whether you get it. The asset still has to make sense for the business.

What to check this year

The threshold and the eligibility rules are set by government and can change between financial years. Rather than assume, confirm the current position before committing to a purchase:

• The current threshold per asset, and whether it applies to your business's turnover.
• Whether the asset must be new or can be second-hand, which has varied over time.
• The deadline for the asset to be installed and ready for use — buying isn't always enough.
• How it interacts with financing the asset, which is a question for your accountant.

Financing and the write-off

A common misconception is that you have to pay cash to claim the write-off. In many cases you can finance an eligible asset and still claim it, because the deduction generally relates to the asset's cost rather than how you paid. That can be a powerful combination: the deduction now, the cost spread over time. Equipment and asset finance is built for exactly this kind of purchase — but check the tax treatment with your accountant first.

What it means for you

If you're eyeing equipment this year, get the tax timing right with your accountant, then make sure the funding is ready to match. A quick application takes around three minutes and won't touch your credit score to check, so you can move when the numbers line up.