Buying equipment and the instant asset write-off

The instant asset write-off is one of the most talked-about small business tax concessions, especially around June. Used well, it brings forward the tax benefit of buying equipment the business genuinely needs. Used badly, it encourages buying things the business does not need.

How it works

Normally, a business asset is depreciated: its cost is claimed gradually over its useful life. The instant asset write-off lets eligible small businesses claim the full cost of an eligible asset in the year it is first used or installed ready for use, provided the asset costs less than the threshold.

For eligible businesses with aggregated turnover under $10 million, the threshold is $20,000 per asset, and it has been made permanent from 1 July 2026, according to the ATO.

What to check with your accountant

• Eligibility of the business and the asset.
• Timing: when the asset is first used or installed ready for use.
• Cost: whether GST and delivery affect the threshold calculation for your business.
• Finance structure: how a chattel mortgage, lease or hire purchase interacts with the write-off.
• Assets over the threshold: how they will be depreciated.

Ready to find out? The enquiry form takes about a minute. No credit check, no spray of your details to a dozen lenders, just a call from a real person.

Cash or finance?

The write-off is about tax timing; it does not pay for the asset. You still need to fund the purchase, and paying cash for several assets before 30 June can leave the business short in July. Equipment finance spreads the cost while the asset earns. Our equipment finance vs paying cash comparison helps you weigh it.

A worked illustration

A landscaping business buys a $16,000 trailer and a $9,000 set of power tools in May, both first used in June. If both are eligible, each falls under the $20,000 threshold, so both may be written off in that financial year. The business finances the trailer and pays cash for the tools, keeping its cash buffer intact for the July insurance renewal. The tax benefit depends on the business’s tax position, which is a question for the accountant.

Common mistakes

Mistake	Why it hurts
Buying something unnecessary for the deduction	The deduction only offsets part of the cost
Buying on 29 June but installing in July	First use may fall in the next year
Draining cash before a tight July	Emergency borrowing later can cost more
Assuming every asset qualifies	Eligibility rules apply

Plan it into EOFY

Equipment decisions are best made as part of a wider EOFY plan that also looks at tax bills, stock and debtors. Our EOFY funding checklist brings it together.

Keep the paperwork

Keep tax invoices, delivery dockets and records of when each asset was installed or first used. If the asset is financed, keep the finance contract too. Good records make the year-end conversation with your accountant quicker and protect the claim if it is ever questioned.

More on this topic

• Equipment finance: Equipment finance lets the business buy machinery, vehicles and tools without draining cash. How asset-secured lending works and what to check first.
• Equipment finance vs paying cash: Should you finance equipment or pay cash? Compare cash flow, total cost, tax, flexibility and risk before buying vehicles, machinery or tools.
• EOFY funding checklist: An end-of-financial-year checklist for business funding: equipment timing, the instant asset write-off, tax bills, stock and arranging facilities for July.
• Business loan costs and tax: the basics: General guidance on how business loan interest, fees and repayments are usually treated for tax, and why you should confirm your situation with an accountant.
• Funding to replace broken equipment: Key machine or vehicle broken down? How to fund a repair or replacement quickly with equipment finance, unsecured funding or a line of credit.

Key terms, in plain English

• Line of credit: an approved limit the business can draw, repay and draw again, usually paying interest only on the drawn balance.
• BAS: the business activity statement used to report and pay GST, PAYG withholding and other amounts to the ATO.
• Total cost of finance: the dollar gap between the cash that reaches your account and everything you hand back over the life of the loan, fees included.

Questions to ask before you sign

• What is the total amount I will repay, including every fee?
• Are there fees for repaying early, and how are they worked out?
• How are repayments collected, and how often?
• What security or guarantees are required?
• What happens if a repayment is missed?

Where your accountant fits in

A good accountant can save you from borrowing too much, too little or in the wrong structure. Share the quote, the purpose and your forecast with them. If they spot something, such as an upcoming tax bill or a better way to structure an asset purchase, it is much easier to adjust before the documents are signed.

The short version

• $20,000 threshold per asset for eligible small businesses
• Made permanent from 1 July 2026
• Timing of first use or installation matters
• Works alongside equipment finance; check with your accountant

How Capital At Call handles it

One enquiry, one team, one clear answer. That is the whole approach. We read what you send, call you, ask for the documents that matter and lay out the options in plain English with the total cost attached. Your details are not shopped around, and your credit file is only checked if you choose to accept an offer. If the answer is no, you will hear it quickly and with a reason, so you can plan your next move.

Is funding the right answer here?

Good borrowing has a job and an end date. Before you enquire, write down in one sentence what the money is for and how it will be repaid. If that sentence is easy to write, you are probably in the right place. If it is not, it is worth a closer look at the business’s cash flow before taking on new repayments.

Before you send the enquiry

You do not need a folder of financial statements to start an enquiry. For most unsecured and property-secured funding, these few items cover the essentials:

• Photo ID for each director or owner.
• Access to your business bank account for a secure statement link.
• Your latest BAS, if it is handy.
• Details of existing finance, including any daily or weekly repayments.
• For property-secured funding, the property address and current loan balance.

Help us match you first time

The enquiry asks for the amount, the purpose, how long you have traded, your monthly revenue, your credit history, your state and whether you own real estate. Each answer steers your enquiry towards the right option. Accurate answers let the first call move straight to solutions. Rounded-up turnover or a credit history that turns out to be different from the form means starting again, which costs everyone time.

See what you could qualify for

If this sounds like your business, start the enquiry. It takes about 60 seconds and runs no credit check. Your details are not sprayed across the market; the team that reads your enquiry is the team that works on it. Please give real numbers rather than hopeful ones. A clear picture of turnover, credit history and property lets us point you to the right funding straight away.