The re-elected Labor government to extend the instant asset write-off for small businesses
As a pre-election promise, the ALP announced the extension of the $20,000 instant asset write-off for small businesses by 12 months, this proposed measure may come into effect in their next term.
This measure will allow small businesses that choose to deduct depreciating assets under the simplified depreciation rules (Subdiv 328-D of ITAA 1997) to continue to deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use by 30 June 2026.
The following conditions must be satisfied in order to be eligible for the instant asset write-off:
- The asset must be first installed or ready to use between 1 July 2025 and 30 June 2026
- The asset must cost less than $20,000
- The annual aggregated turnover of the business must be less than $10 million.
The $20,000 threshold will apply on a per asset basis, so you can instantly write off multiple assets.
Assets valued at $20,000 or more (which cannot be immediately deducted) can continue to be placed into the small business simplified depreciation pool and depreciated at 15% in the first income year and 30% each income year thereafter.
Please note:
This measure is still in announcement stage and will require Parliamentary approval to become law.
Please free to contact our office should you have any queries in relation to these announcements.
