Notably, in the 2025-26 Budget announcement, the instant asset write-off extension was not initially included.
However, the Government has revised and promised to extend the $20,000 instant asset write-off for a further 12 months, until 30 June 2026. As a result, other parties and independents are debating an increase to the amount, and the measure’s permanency, particularly concerning their election promises.
The Opposition party, for example, has promised to make the measure permanent and increase the threshold to $30,000 as part of its election policies.
What Does This Mean For The 2024-25 Income Year?
If your business has an aggregated turnover of less than $10 million, you’ll be able to:
- Immediately deduct the full cost of eligible assets costing less than $20,000 – provided they are first used or installed ready for use between 1 July 2024 and 30 June 2025.
- Claim a deduction for certain improvements or additions (known as “second element costs”) made to assets you’ve already written off in previous years. To qualify, the extra cost must be:
- The first amount you’ve spent on the asset after the year it was written off, and
- Less than $20,000, and incurred between 1 July 2024 and 30 June 2025.
Notably, the $20,000 threshold applies per asset, not in total. So you can write off multiple assets under this rule, as long as each one is under the $20,000 limit.
What About Assets Over $20,000?
You won’t get the full write-off immediately if an asset costs $20,000 or more. Instead, you can still place it into the small business depreciation pool:
- Deduct 15% in the first year the asset is used or installed, ready for use
- Then 30% each year after that
The impact of this measure ending on your end-of-year planning could have required an entirely new strategy, if it had not been addressed!
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