For years, the $20,000 instant asset write-off has been a lifeline for small businesses — letting you immediately deduct the full cost of eligible assets rather than writing them off gradually over multiple years. The only problem was the uncertainty. Each year, the question loomed: will it be extended again? That question has now been answered. The 2026 Federal Budget has made the $20,000 instant asset write-off permanent.

What this means for your business

From 1 July 2026, if your business has an annual turnover of less than $10 million, you can immediately deduct the full cost of any eligible business asset costing less than $20,000. This applies to assets purchased and first used (or installed ready for use) in your business before the end of the financial year.

Assets costing $20,000 or more can continue to be added to your small business simplified depreciation pool, where they are written off at 15% in the first year and 30% each year after that. The rules that previously prevented businesses from re-entering the simplified depreciation regime for five years after opting out will also continue to be suspended until 30 June 2027.

Why permanence matters

In past years, the write-off threshold changed multiple times and only ever existed as a temporary measure. This made planning difficult. Businesses were sometimes unsure whether to bring forward equipment purchases, or whether the write-off would still be in place when they finally committed. Making it permanent removes that uncertainty and lets you plan your capital expenditure with confidence.

If your business needs new equipment, tools, vehicles, technology, or other depreciating assets, you no longer need to time purchases around legislative renewal. You can buy what the business needs, when the business needs it — and claim the full deduction in the year of purchase.

Also from the Budget: monthly PAYG instalments

From 1 July 2027, small and medium businesses will be able to opt in to paying their PAYG income tax instalments on a monthly basis and to use ATO-approved calculations embedded directly in their accounting software to work out instalment amounts. This is designed to make tax payments better reflect real-time business activity, reducing the risk of large unexpected tax bills at lodgement time. This is an opt-in arrangement — you won’t be required to change unless you choose to.

The bottom line

The permanent instant asset write-off is one of the most practical budget measures in recent years for small business owners. If you have been holding off on equipment purchases while waiting for certainty, that certainty has now arrived.

Get in touch with us before 30 June to review your asset purchase plans and make the most of this permanent change.