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Instant Asset Write-Off Extended for 2025: What Small Businesses Need to Know

  • Writer: 凯mi
    凯mi
  • 8 hours ago
  • 2 min read

Instant Asset Write-Off
Instant Asset Write-Off

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The Federal Government has officially extended the $20,000 Instant Asset Write-Off scheme into the 2025 financial year — great news for small businesses looking to invest in their operations while managing tax obligations effectively. 


Whether you’re investing in new tools, upgrading office equipment, or planning strategic purchases before 30 June 2025, this measure could improve your cash flow and support business growth. 


What Is the Instant Asset Write-Off?

The Instant Asset Write-Off allows eligible businesses to immediately deduct the full cost of assets costing less than a specified threshold. For the 2025 financial year, the threshold remains at $20,000 per asset, rather than being depreciated over several years. 


This incentive is designed to support business investment and cash flow by providing faster tax relief when purchasing eligible depreciating assets. 


Who Is Eligible?

To be eligible for the $20,000 write-off in the 2025 income year, your business must: 


  • Have an aggregated turnover of less than $10 million 

  • Purchase and first use or install the asset between 1 July 2024 and 30 June 2025 

  • Use the asset for business purposes 

  • Ensure each individual asset costs less than $20,000 (excluding GST if GST-registered) 


What Assets Qualify?

The deduction applies to most tangible depreciating assets used in the business, such as: 


  • Office furniture and fittings 

  • Computers and laptops 

  • Tools and equipment 

  • Commercial kitchen appliances 

  • Vehicles (note: only if under the $20,000 threshold) 


If you purchase multiple assets, each one under the threshold can be claimed individually. 


Important Points to Remember 

  • Assets over $20,000 cannot be instantly written off but may be placed into the small business simplified depreciation pool and depreciated at 15% in the first year and 30% in subsequent years. 

  • You cannot immediately write off:

    • capital works (e.g. buildings)

    • software development costs

    • leased assets

  • Second-hand assets are also eligible under this scheme. 

  • The measure is temporary – it’s only legislated for the 2025 income year (unless extended again). 


 What This Means for Your Business

This extension provides a strategic opportunity to upgrade essential business assets and potentially reduce your tax bill. Whether you're a sole trader upgrading your tools, or a growing company refreshing your tech infrastructure, this could be a great time to plan purchases. 


To ensure asset purchases meet deduction eligibility and are accurately reported, businesses should maintain complete documentation and carefully assess their individual circumstances. It is particularly important to note that the Instant Asset Write-Off is only available until 30 June 2025. Therefore, businesses should proactively plan their acquisitions and funding arrangements to ensure compliance within the legislated timeframe and maximize the tax benefits available. 


For tailored assistance, our professional team is ready to support you in leveraging this opportunity before financial year-end and achieving the most effective tax planning outcomes.

 


Source:  Instant asset write-off for eligible businesses, ATO website. Instant asset write-off for eligible businesses | Australian Taxation Office

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