The Clock Is Ticking on the $20,000 Write-Off
If you run a small business and you’ve been putting off upgrading your equipment, machinery, or commercial vehicles, the 2025–26 Federal Budget has given you one more year — but only one — to take advantage of the $20,000 instant asset write-off. The extension runs to 30 June 2026, after which the threshold is legislated to drop back to just $1,000.
For businesses thinking about equipment or fleet purchases, the message is clear: the best tax outcome is available right now, and the window is closing.
Who Qualifies for the $20,000 Write-Off?
To access the instant asset write-off in 2025–26, your business must have an aggregated annual turnover of less than $10 million. This captures a very wide range of small and medium businesses across all industries, from sole traders and partnerships through to private companies.
Eligible assets include trucks, vans, utes, and commercial vehicles; earthmoving, agricultural, and construction equipment; manufacturing machinery and tools; IT hardware, point-of-sale systems, and business technology; and office furniture and fit-out items. Both new and second-hand assets qualify, provided the asset is first used or installed ready for use before 30 June 2026. The $20,000 threshold applies per asset — you can write off multiple assets in the same year as long as each one costs less than $20,000 individually.
How Equipment Finance Lets You Act Without Depleting Cash
One of the biggest misconceptions about the instant asset write-off is that you need to pay cash upfront. You don’t. Asset finance products like chattel mortgage and commercial hire purchase allow you to acquire the equipment through a lender, with the asset legally structured in a way that lets you claim the upfront deduction at tax time — even though you’re paying for it in monthly instalments.
This means a business can acquire a $19,500 piece of machinery using equipment finance, claim the full $19,500 as a deduction in the 2025–26 tax return, and repay the loan over 24, 36, or 48 months to preserve cash flow. The tax benefit comes upfront, while the cash outflow is spread over time. For businesses in a profitable year looking to reduce their tax liability, this is a powerful strategy.
The Car Cost Limit Still Applies to Business Vehicles
If you’re purchasing a passenger car or vehicle designed to carry fewer than nine passengers, be aware that the Australian Tax Office applies a car cost limit (currently $69,674 for 2025–26). This caps the value of the vehicle that can be depreciated for tax purposes, regardless of the actual purchase price. Commercial vehicles like trucks, utes used primarily for business, and vehicles designed to carry goods are generally not subject to this limit. Your accountant can confirm the correct treatment for your specific vehicle.
Plan Now to Beat the June 2026 Deadline
Equipment and vehicle finance doesn’t happen overnight. Finance applications need to be submitted, assessed, and approved — and delivery or installation of the asset needs to occur before 30 June 2026 for the deduction to apply in this financial year. Businesses that wait until May or June may run into supplier lead times or lender processing delays that push the asset acquisition past the deadline.
Starting the process now gives you the best chance of having assets in place with maximum time to spare.
Get a Fast Finance Quote
At Journey Finance, we specialise in truck, equipment, and commercial vehicle finance for Australian small businesses. We work with a panel of lenders to find competitive rates and flexible loan structures that suit your business’s cash flow.
Explore your options with Journey Finance truck and equipment finance, or if you’re after a business car or ute, check out our car finance page. Our brokers are ready to help you act before the write-off deadline.
This article is for general information only and does not constitute financial or tax advice. Please consult a qualified accountant or financial adviser for advice specific to your situation.