The instant asset write off has become an annual soap opera, and 2026 delivered a twist: the Government announced in the May Budget that the $20,000 threshold will be permanent from 1 July 2026. Permanent is a big word in tax policy. The catch is a familiar one.
What is solid
For the 2025-26 year just ended, the $20,000 threshold applied. Eligible assets costing under $20,000 that were first used or installed ready for use by 30 June 2026 can be written off in full in the return being prepared now. If you bought the ute canopy, the espresso machine or the server before 30 June, that deduction is safe.
What is still pending
The permanent measure for 2026-27 onward had not passed Parliament as at the time of writing, and the ATO's own guidance notes it is not yet law. Until the bill passes, the legislated default threshold for assets first used from 1 July 2026 is technically $1,000. Nobody expects that outcome to stand, and the measure has bipartisan noise around it, but announcements do not create deductions. Acts of Parliament do.
How to play it
- Assets under $20,000 your business genuinely needs now: buy them when the business case says so. The write off, when legislated, applies per asset, so multiple assets can each qualify.
- Purchases being made purely to bank the tax break: wait for royal assent, or at least accept the small risk that timing gets messy.
- Remember the threshold is GST exclusive if you are registered, and the $10 million aggregated turnover test applies.
And the oldest advice still holds: a $20,000 deduction saves you the tax on $20,000, not $20,000. Buying something the business does not need is a loss dressed as a strategy.