Instant tax write-off for small business assets extended
The Treasury Laws Amendment (Increasing the Instant Asset Write-Off for Small Business Entities) Bill 2019 was passed by the Senate and the House of Representatives on the morning of 4th April 2019, with 18 government amendments which give effect to the federal budget announcement to increase the threshold to $30,000 and expand the eligibility to medium-sized businesses with a turnover of less than $50 million.
“The Treasury Laws Amendment (Increasing the Instant Asset Write-Off for Small Business Entities) Bill 2019 … increases the threshold to A$30,000 and expands eligibility to medium-sized businesses with turnover of less than A$50 million.”
While the amendments have passed, the bill does not become law until it receives royal assent.
The amendments mean that there will be three tiers for accountants and their clients to consider within the 2019 financial year, due to Prime Minister Scott Morrison’s announcement to raise the threshold to $25,000 in January.
- The first tier will be the $20,000 threshold for depreciable assets that are acquired before 29 January 2019;
- the second being the $25,000 threshold for assets first used or installed between 29 January 2019 and 2 April 2019; and
- the third tier being the $30,000 threshold for assets first used and installed after the 2 April budget announcement and before 1 July 2020.
If you have any questions regarding this matter, please do not hesitate to contact us.
Norman Ruan
Accountant
T: 02 9984 7774
E: normanr@northadvisory.com.au
About the author
Marius Fourie - Director & Business Advisor
As Director and Business Advisor, Marius uses his accounting expertise and empathetic skills to work directly with business owners and help them feel at ease with their finances.
Marius saw a common need in clients that just wasn’t being met by accounting providers.
That need was for clear, open communication and streamlined accounting services that didn’t come padded out with any unnecessary features.
Business owners just don’t have time to compare different accounting firms to see which one has the best packages with the best inclusions (many of which they would pay for but never use).
Key Takeaways
IAWO remains a valuable deduction tool for small businesses — now extended through 30 June 2026.
This gives eligible businesses more time to plan asset purchases and benefit from immediate tax deductions.
The current asset-cost threshold is A$20,000 — realistic for many everyday business purchases.
This makes the write-off accessible for items like tools, office equipment, furniture, and small machinery.
Using IAWO can significantly improve cash flow.
By deducting the full cost in the year of purchase, businesses reduce taxable income immediately — potentially lowering tax payable that year and freeing up cash for reinvestment.
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Frequently Asked Questions
What is the Instant Asset Write-Off (IAWO)?
IAWO is a tax concession that permits eligible businesses to immediately deduct the full cost of certain depreciating assets — in the same year the asset is first used or installed — instead of spreading the deduction over multiple years under standard depreciation rules.
Which businesses are eligible for the write-off under the most recent rules?
For the 2024–25 (and now 2025–26) income years, small businesses with an aggregated annual turnover of less than A$10 million may qualify, under the “simplified depreciation” rules.
What is the asset-cost limit under the current IAWO extension?
As of the latest extension, each individual asset must cost less than A$20,000 (excluding GST, if GST-registered) to qualify for the write-off for the 2024–25 and 2025–26 years.
Can I claim multiple assets in one year under IAWO?
Yes — the write-off applies per asset. As long as each individual asset meets the cost and eligibility criteria, you can claim the deduction for multiple assets in the same year.
Are there any assets excluded from the write-off?
Yes. Some depreciating assets are excluded (or subject to special rules), such as certain vehicles (subject to car cost limits), horticultural plants, capital works (e.g. buildings), software development pool assets, and assets leased out under a depreciating-asset lease.
What does the extended instant asset write-off mean for small businesses?
It means eligible small businesses can immediately deduct the full cost of qualifying assets in the year they’re first used or installed — up to the current threshold — instead of depreciating them over several years. This helps reduce taxable income sooner and improve cash flow by letting me write off purchases like equipment, tools or vehicles right away.
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