What Is the Instant Asset Write-Off?
The Instant Asset Write-Off is a tax incentive that lets you instantly deduct the full cost of assets you buy for your business, rather than depreciating them over time. This means you can reduce your taxable income for the year, which may help with your cash flow and budgeting.
This deduction falls under the ATO’s simplified depreciation rules, specifically designed to support eligible small businesses.
What’s New for 2024–25?
The Federal Government has officially extended the $20,000 Instant Asset Write-Off to cover 2024–25 financial year, with legislation recently passed in May 2025.
What’s New for 2024–25?
The Federal Government has officially extended the $20,000 Instant Asset Write-Off to cover 2024–25 financial year, with legislation recently passed in May 2025.
Key Points in the extension include:
- The threshold remains at $20,000 (excluding GST for GST-registered businesses).
- Eligible assets must be first used or installed ready for use between 1 July 2024 and 30 June 2025.
- The threshold applies per asset, meaning you can claim multiple assets as long as each individual item costs less than $20,000.
This extension is part of the government’s ongoing support for small businesses, allowing more time to plan and make strategic asset purchases
Who Can Use the Instant Asset Write-Off?
To access the write-off, your business must:
- Have an aggregated annual turnover of less than $10 million.
- Use the simplified depreciation rules.
If you’re not sure whether this applies to you, seek assistance from Chan & Naylor for a more detailed look at your eligibility.
What Assets Can You Claim?
You can claim the Instant Asset Write-Off on new or second-hand assets used for business purposes. Some examples include:
- Office furniture
- Tools and equipment
- Laptops and computers
- Point-of-sale systems
The asset must be used or ready to use in your business before 30 June 2025.
What If the Asset Costs More Than $20,000?
If an eligible asset costs $20,000 or more, it cannot be immediately deducted. Instead:
It must be added to your small business depreciation pool.
Depreciation is calculated over time.
If the balance of the pool is less than $1,000 at the end of the income year, the entire amount can be written off.
Why This Matters for Your Tax Planning
Claiming the Instant Asset Write-Off can:
- Reduce your taxable income in the year of purchase
- Improve your cash flow
- Help you invest in your business without the long wait for tax benefits
It’s a smart move for businesses looking to grow while keeping an eye on their bottom line.
Few Tips Before You Claim
Before you rush to make a purchase, remember to:
- Confirm your eligibility as a small business
- Keep detailed records of the purchase, including invoices and proof of use
- Ensure the asset is installed and ready to use by 30 June 2025
Talk to a Tax Professional
The Instant Asset Write-Off can offer real value but only if it’s applied correctly. If you want to make the most of this opportunity, speak to a qualified tax professional. At Chan & Naylor, we can help you navigate the rules and claim what you’re entitled to, without the guess work.
About Chan & Naylor
Established in 1990, Chan & Naylor has been a trusted partner for thousands of businesses and investors across Australia. Based in Sydney, we provide expert accounting services tailored to your needs. Choosing Chan & Naylor means you’re not just selecting a service provider; you’re gaining a partner aligned with your business goals. You’ll have access to a dedicated client manager supported by a team of accountants that specialises in business tax and investments. Contact us today so we can discuss how we can help you.
Disclaimer
This article serves as general information only and may not account for the unique circumstances of individual readers. For personalised and strategic solutions tailored to your specific situation, we invite you to seek professional advice from Chan & Naylor. Our highly experienced team is dedicated to helping you navigate the complexities of Australian taxation, ensuring that your financial strategies align with the latest regulations. Contact us today to embark on a path of informed and customised tax planning for your property investments.
