The Instant Asset Write-Off is permanent from 1 July 2026: small businesses with aggregated turnover under $10 million can immediately deduct each eligible asset costing less than $20,000 (ato.gov.au). For operators in transport, construction, agriculture and earthmoving, the limit applies to each piece of equipment, not to the business as a whole.
Here is how it works and how it fits with equipment finance. Confirm your own tax position with your accountant.
What Is the Instant Asset Write-Off?
The Instant Asset Write-Off (IAWO) allows eligible small businesses to immediately deduct the full cost of a depreciating asset in the income year it is first used or installed ready for use, rather than depreciating it over several years.
It is a tax deduction, not a government grant. You still purchase the asset yourself; the write-off reduces your taxable income rather than paying money to your business.
From 1 July 2026:
- Threshold: Assets costing less than $20,000 each
- Who qualifies: Businesses with an aggregated annual turnover of less than $10 million
- Timing: Claimed in the income year the asset is first used or installed ready for use
Assets costing $20,000 or more can still be placed in the small business simplified depreciation pool and depreciated at accelerated rates.
What Assets Qualify?
Almost any depreciating asset used in your business can qualify, including:
- Trucks, trailers, prime movers and refrigerated vehicles
- Excavators, dozers, loaders and other earthmoving equipment
- Tractors, harvesters and farm machinery
- Forklifts, telehandlers and crane trucks
- Workshop tools, fitouts and technology
If you have been thinking about upgrading your rig, your excavator or your fleet, the write-off can reduce your taxable income for the year the asset is first used or installed ready for use. Confirm your own tax position with your accountant.
How Does It Work With Equipment Finance?
Here is the important bit: you do not need to pay cash to claim the write-off.
If you purchase an asset using a Chattel Mortgage (also called an equipment loan), you take ownership of the asset at settlement, meaning the asset is "acquired" in the eyes of the ATO at that point. You can claim the full write-off in your tax return even though you are still making repayments.
This means you could:
- Finance a $19,500 tipper truck upgrade through Equifund
- Have it first used or installed ready for use before 30 June
- Claim the full $19,500 as a deduction in the year it is first used or installed ready for use
- Keep your working capital intact while reducing your tax bill
Finance Structures That Qualify
| Structure | Ownership | Write-Off Eligible? |
|---|---|---|
| Chattel Mortgage | You own the asset | ✓ Yes |
| Commercial Hire Purchase | You own after final payment | ✓ Yes |
| Finance Lease | Lender owns asset | ✗ No (lease payments deductible instead) |
| Operating Lease / Rental | Lender owns asset | ✗ No |
Always confirm your specific structure with your accountant or tax adviser.
Key Dates to Lock In
Lenders process high volumes in the lead-up to each EOFY, and settlement times can stretch in May and June. To give your asset the best chance of being installed ready for use by 30 June, you should:
- Apply by mid-May if you want the asset in use by 30 June
- Have your financials (last two years of tax returns or BAS) ready
- Choose an asset that is available from stock (not custom order)
Frequently Asked Questions
What is the Instant Asset Write-Off for 2026?
The Instant Asset Write-Off allows eligible Australian businesses to immediately deduct the full cost of qualifying assets costing less than $20,000, a threshold that is permanent from 1 July 2026. Vehicles and equipment used for business qualify; private-use assets do not.
Is the Instant Asset Write-Off a government grant?
The Instant Asset Write-Off is a tax deduction, not a grant or a government payment. You buy the asset yourself, then claim the business portion of its cost against your taxable income in the year it is first used or installed ready for use. It reduces the tax you pay rather than putting money into your account. Equifund is a commercial finance broker and can arrange finance for the purchase, but government grant programmes are separate and are not something we administer.
What assets qualify for the Instant Asset Write-Off in 2026?
Trucks, trailers, excavators, forklifts, farm machinery, and most business-use vehicles and equipment qualify if the asset costs under $20,000 and is used in your business. It can be new or used, and is claimed in the income year it is first used or installed ready for use.
Do I need to own the asset outright to claim the write-off?
You must take legal ownership of the asset. A chattel mortgage and hire purchase both transfer ownership to you, so both qualify. A finance lease or operating lease does not transfer ownership, so the lender claims the depreciation benefit instead of you.
What finance structure works best with the Instant Asset Write-Off?
A chattel mortgage is the most common structure for maximising the write-off. You take ownership on settlement, claim the full asset cost as a deduction in the same tax year, and also claim the GST on the purchase price upfront on your next BAS.
Is the $20,000 threshold per asset or per business?
The $20,000 threshold applies per individual asset, not per business. A business can claim multiple assets under the threshold in the same year. Assets costing over $20,000 cannot be split to fall under the threshold. They depreciate under the small business pool rules instead.
How Equifund Can Help
Equifund compares a wide panel of specialist lenders to match your deal with lenders on the panel. Our team specialises in heavy equipment finance for Australian operators and we know how lender turnaround times vary in the lead-up to EOFY.
- Pre-approval in 24 hours
- No impact on your credit score to get a rate
- Finance amounts up to $2M
- Owner-operators, ABN holders and company structures welcome
Do not wait until June to start the conversation. The lenders' queues get longer every week from April.
This page is general information only and does not constitute tax, financial or legal advice. Tax outcomes depend on your individual circumstances. Speak to your tax adviser before relying on any information here. Equifund is a credit broker, not a tax adviser or financial planner. Finance is subject to lender criteria. Terms, conditions, fees and charges apply. Equifund Financial Group, ACN 647 510 790, Australian Credit Licence 389328.
Sources: ATO, Instant Asset Write-Off. Figures are current at the time of writing and may change.