ATO rules
Instant Asset Write Off
Eligible small businesses can immediately deduct the full cost of qualifying plant and equipment rather than depreciating it over several years. Here is how to use it when buying machinery in Australia for the 2025-2026 financial year.
What's it worth to you?
Asset cost (ex GST)$18,000
Your business tax rate25%
Estimated tax saving
$4,500
Full $18,000 deductible this financial year
Who qualifies
- Small business entity with aggregated turnover under $10 million
- Asset must be first used or installed ready for use in the income year
- Cost is below the threshold per asset (currently $20,000 for 2025-2026)
- Both new and second hand plant qualify
Stacks with finance
- Buy on chattel mortgage and you still claim the full deduction in year 1
- GST on the purchase is claimed back on the next BAS
- Interest on the loan is separately deductible
- Cash impact: small monthly repayment, big up front tax saving
Always verify with your accountant
ATO thresholds and small business definitions are updated each federal budget and have shifted several times since 2020. Higgy provides indicative information only — confirm the current rules with a registered tax agent before purchase.