EOFY 2026 Equipment Finance: The $20,000 Instant Asset Write-Off Is About to Disappear and Most Businesses Are Not Ready
On 30 June 2026, the $20,000 instant asset write-off expires. On 1 July, the threshold reverts to $1,000. That is not a typo. One thousand dollars. A figure so low it is functionally useless for any meaningful business purchase. A decent laptop costs more than that. A pressure washer costs more. A second-hand welder costs more.
Unless the federal government announces another extension, and as of today no extension has been legislated or even formally proposed for 2026/27, every Australian small business that has been relying on this scheme to manage tax and cash flow is about to lose it.
And this year, losing it hurts more than usual. The RBA has hiked rates twice already in 2026. The fuel crisis triggered by the closure of the Strait of Hormuz is pushing input costs up across every sector. The S&P Global Australia Manufacturing PMI fell below 50 in March for the first time in five months, signalling contraction. Businesses are under more pressure now than at any point since the pandemic, and the one tax incentive that was specifically designed to encourage investment in equipment is about to fall off a cliff.
At Australian Finance & Loans, we work with a panel of over 50 lenders to help Australian businesses finance equipment, vehicles, machinery and technology. We are an independent brokerage, not a lender. We compare across the market and find the right structure for your situation. This guide explains exactly how the instant asset write-off works in 2026, which finance structures qualify (and which do not), what the real deadlines are, and how to make the most of the remaining weeks before the window closes.
What the $20,000 Instant Asset Write-Off Actually Is
The instant asset write-off 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 claiming depreciation over multiple years. The current threshold is $20,000 per asset (excluding GST if you are GST-registered), and it applies to businesses with an aggregated annual turnover of less than $10 million.
The threshold applies per asset, not per business. That means you can buy a $15,000 piece of equipment, a $12,000 work vehicle accessory and an $8,000 IT system in the same financial year and write all three off immediately, provided each individual asset is under $20,000 and is installed ready for use before 30 June 2026.
Assets costing $20,000 or more do not qualify for the instant write-off. They go into the small business simplified depreciation pool, where they are depreciated at 15% in the first year and 30% of the declining balance in each subsequent year. That is still favourable compared to standard depreciation, but it is a fundamentally different outcome from claiming the full deduction upfront.
Both new and second-hand assets are eligible. The asset must be used or installed ready for use for a business purpose by 30 June 2026. Ordering the asset is not enough. Having it delivered but sitting in a box is not enough. It must be operational and genuinely ready for use in your business before the financial year closes.
The History Matters: Why This Year Feels Different
The instant asset write-off was first introduced by the Abbott government in the May 2015 budget, lifting the threshold from $1,000 to $20,000. Since then, it has been extended, expanded, and reintroduced in various forms in almost every subsequent budget. During COVID-19, the threshold was temporarily lifted to $150,000 and then replaced entirely by Temporary Full Expensing, which allowed businesses to write off assets of any value until 30 June 2023.
Since July 2023, the threshold has been set at $20,000, extended year by year. The most recent extension, covering the 2025/26 financial year, was legislated in November 2025 through the Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Act 2025.
Here is what makes this year genuinely uncertain. Every previous extension has been announced or at least flagged well before the expiry date. This time, there has been no announcement, no budget measure, and no formal indication from the Treasurer's office that the scheme will continue beyond 30 June 2026. The federal budget is expected in May, which could include an extension, but relying on a budget announcement that has not yet been made is a gamble. If the extension does not come, the threshold drops to $1,000 on 1 July and there is no retrospective fix.
Treasurer Jim Chalmers has spoken positively about the scheme's role in supporting small business investment, and industry bodies including CAFBA and COSBOA have called for the threshold to be made permanent at $150,000. But positive sentiment and formal legislation are not the same thing. If you are planning an equipment purchase, the prudent approach is to treat 30 June 2026 as a hard deadline.
Your Finance Structure Determines Whether You Get the Write-Off
This is the point most guides bury in a footnote, but it is the single most important factor in EOFY equipment finance: not all finance structures qualify for the instant asset write-off. The structure you choose determines your tax outcome.
Chattel Mortgage: Qualifies
A chattel mortgage is the cleanest structure for claiming the instant asset write-off. You own the asset from settlement day one. The lender holds a mortgage over it as security, but ownership sits with you. That means you claim the depreciation (or in this case, the instant write-off), you claim the GST on the purchase price on your next BAS, and you claim the interest on the loan as a separate deduction over the life of the finance. For businesses targeting an EOFY write-off, chattel mortgage is the default answer in almost every scenario. Full details on how a chattel mortgage works for Australian businesses are available on our blog.
Hire Purchase: Qualifies
In a hire purchase, the lender technically owns the asset until the final payment, at which point ownership transfers to you. However, for Australian tax purposes, you are treated as the owner from day one. That means hire purchase receives the same tax treatment as a chattel mortgage: you can claim the instant asset write-off, the upfront GST credit, and the interest deduction. The practical difference between a chattel mortgage and a hire purchase is minor for most businesses.
Finance Lease: Does Not Qualify
In a finance lease, the lender retains ownership of the asset for the entire lease term. You lease it for a fixed period and may have the option to purchase it at the end for a residual amount. Because the lender owns the asset, the lender claims the depreciation. You cannot claim the instant asset write-off on a finance lease. Your deduction is the lease payment itself, spread over the term. If your goal is to maximise the EOFY tax benefit, a finance lease is the wrong structure.
Operating Lease: Does Not Qualify
An operating lease is essentially a rental arrangement. The lender owns the asset, you pay a regular rental fee, and you return the asset at the end. There is no ownership, no depreciation claim, and no instant write-off. Operating leases suit businesses that want to use equipment for a defined period and upgrade regularly, but they are not EOFY tax planning tools.
The takeaway is simple. If you want to claim the $20,000 instant asset write-off before 30 June, you need to finance through a chattel mortgage or hire purchase. If your broker or lender is suggesting a lease structure, make sure you understand the tax implications before you sign.
The Real Deadline Is Not 30 June
The ATO deadline says 30 June. But the real deadline for most businesses is several weeks earlier, because three things need to happen before the financial year closes: your finance application needs to be approved, the loan needs to settle, and the asset needs to be delivered, installed and ready for use.
For a straightforward chattel mortgage on equipment that is in stock and ready to deliver, the process typically takes 5 to 10 business days from application to settlement, assuming your documentation is clean and complete. That means submitting your application by around 12 to 16 June gives you a reasonable buffer.
For more complex applications, larger loan amounts requiring full financials, new lender relationships, or equipment that needs to be ordered or imported, the timeline stretches to 15 to 25 business days. That puts the effective application deadline in late May to early June.
For custom-built, imported or long-lead-time equipment like CNC machinery, medical imaging systems, heavy earthmoving plant or specialised manufacturing equipment, the delivery timeline alone can run 6 to 12 weeks. If you are buying this type of equipment, you are already past the comfortable planning window and need to be talking to your broker and your supplier this week to confirm whether a 30 June settlement is realistic.
Getting your finance pre-approved before you finalise the purchase is one of the smartest moves you can make. Pre-approval gives you certainty on your budget, eliminates the risk of finance delays holding up the purchase, and means you are ready to settle the moment the asset is available. Our team at Australian Finance & Loans can typically turn around a pre-approval within 24 to 48 hours for straightforward applications.
You Do Not Need to Pay Cash to Get the Write-Off
This is one of the most common misconceptions we encounter. Many business owners assume they need to pay for the asset outright to claim the instant write-off. That is not how it works.
The instant asset write-off is calculated on the cost of the asset, not on how you pay for it. If you finance a $19,000 piece of equipment through a chattel mortgage, putting $5,000 down and borrowing $14,000, the write-off is still based on the full $19,000 cost of the asset. You get the full tax deduction and you keep your working capital intact. The loan repayments then run over the term you choose (typically 2 to 5 years for equipment), with the interest component deductible as a separate business expense.
This is precisely why equipment finance and the instant asset write-off work so well together. You preserve your cash, you get the upfront tax benefit, and you spread the cost over a manageable repayment schedule. For businesses that are already managing tight cash flow in a rising rate environment, this combination can be the difference between making a strategic investment and deferring it indefinitely.
For a full comparison of equipment finance structures, including how loans and leases differ in practice, read our guide on how to choose the right equipment finance option for your business.
What to Buy Before 30 June: Practical Examples
The $20,000 per-asset threshold covers a wide range of genuine business purchases. Here are some of the most common assets businesses are financing through our panel right now to take advantage of the write-off before it expires.
Tools and trade equipment for construction, plumbing, electrical and general trades. Power tools, diagnostic equipment, compressors, welding rigs and pressure washers regularly fall under the $20,000 threshold. Businesses needing specialist equipment can explore options through our tool loans, welding equipment loans, air compressor loans or high-pressure washer loans pages.
IT and technology. Laptops, desktops, servers, networking hardware, POS systems and cybersecurity equipment. Most individual IT purchases sit comfortably under $20,000 and are ideal candidates for the write-off. See our IT and technology loans page for more detail.
Commercial kitchen and hospitality equipment. Ovens, fridges, dishwashers, coffee machines and fit-out items for cafes, restaurants and food businesses. Many of these sit under the threshold when purchased individually. See our hospitality and catering loans page for options.
Medical and dental equipment. Smaller diagnostic devices, sterilisation equipment, patient monitoring systems and practice fit-out items. Larger medical assets like imaging systems will exceed the $20,000 threshold but can still be placed into the depreciation pool. See our medical equipment loans page for more detail.
Agricultural equipment. Fencing tools, irrigation components, smaller implements and farm technology. For larger agricultural machinery, the depreciation pool still provides favourable treatment. See our farming and agriculture loans page for options.
Office fit-outs and furniture. Desks, chairs, meeting room setups, signage and interior fit-out components purchased as individual assets under $20,000 each. See our fit-out loans page for options.
What About Assets Over $20,000?
If your equipment purchase exceeds the $20,000 threshold, the instant write-off does not apply. But the asset goes into the small business simplified depreciation pool, where it is depreciated at 15% in the first income year and 30% of the declining balance each year after that. Additionally, if the total balance of your depreciation pool falls below $20,000 at the end of the 2025/26 income year, you can write off the entire pool balance in one go.
For businesses purchasing larger assets like trucks, excavators, CNC machines, medical imaging equipment or fleet vehicles, the depreciation pool still provides meaningful tax benefits even though the immediate write-off is not available. And financing through a chattel mortgage still gives you the GST credit upfront and the interest deduction over the loan term.
Our panel of 50+ lenders includes specialist equipment finance providers who understand the asset types, valuations and risk profiles of every major industry. Whether you are financing a $15,000 air compressor or a $500,000 excavator, we compare across the market to find the most competitive rate and the right structure for your situation. See our full range of small business loans and heavy machinery loans for more detail.
Payday Super Starts 1 July: Plan Your Cash Flow Now
There is another reason to think carefully about your cash flow position heading into July. From 1 July 2026, the Payday Superannuation reforms take effect, requiring employers to pay superannuation guarantee contributions at the same time as ordinary wages, rather than quarterly. This is a significant change for many small businesses that have historically managed super as a quarterly lump sum payment.
The practical effect is that businesses will need to fund super contributions on every pay cycle from 1 July, which increases the cash flow requirements in the first few months of the new financial year. For businesses that are also managing equipment loan repayments, tax obligations and elevated operating costs due to the fuel crisis, getting the timing and structure of any EOFY equipment purchase right is critical.
This is where a well-structured chattel mortgage with an appropriate balloon payment can help. Setting a balloon of 15% to 30% of the asset cost reduces your monthly repayments during the loan term, preserving cash for other obligations including the new super timing requirements. At the end of the term, you can refinance the balloon, pay it from cash reserves, or sell the asset to cover it. Your broker can model the repayment scenarios for your specific situation.
Ready to Lock In Your EOFY Equipment Finance?
The team at Australian Finance & Loans can help you compare equipment finance options across 50+ lenders, find the right structure for your tax position, and get your application approved quickly so you settle before 30 June.
We are an independent brokerage. We do not sell our own products. We compare the market and work for you.
Book a Free Call | Call 1300 194 926 | Email info@australianfinanceloans.com
Frequently Asked Questions
Can I claim the instant asset write-off if I finance the equipment?
Yes. The write-off is based on the cost of the asset, not how you pay for it. If you finance a $19,000 piece of equipment through a chattel mortgage, you can still write off the full $19,000 in the 2025/26 financial year. The loan repayments are a separate matter, and the interest component is deductible as an ongoing business expense.
What is the difference between a chattel mortgage and a finance lease for EOFY purposes?
With a chattel mortgage, you own the asset from day one and can claim the instant asset write-off, the upfront GST credit and depreciation. With a finance lease, the lender owns the asset and you cannot claim the write-off. If your goal is to maximise the EOFY tax benefit, a chattel mortgage is almost always the right structure.
What happens if my equipment is not delivered before 30 June?
The ATO requires the asset to be installed and ready for use by 30 June 2026 to qualify for the instant write-off in the 2025/26 financial year. An asset that has been ordered but not delivered, or delivered but not yet installed, does not qualify. If delivery is uncertain, it may be better to plan the purchase for the next financial year rather than risk missing the deadline and losing the deduction.
Will the instant asset write-off be extended beyond 30 June 2026?
As of April 2026, no extension has been legislated or formally announced for the 2026/27 financial year. The federal budget is expected in May and may include an extension, but this is not guaranteed. If the threshold is not extended, it reverts to $1,000 on 1 July 2026. Businesses that want certainty should treat 30 June 2026 as a hard deadline.
What is the turnover threshold for eligibility?
Your business must have an aggregated annual turnover of less than $10 million to access the $20,000 instant asset write-off under the simplified depreciation rules. Aggregated turnover includes the turnover of any connected or affiliated entities, so check with your accountant if your business structure involves related companies or trusts.
Can I write off multiple assets?
Yes. The $20,000 threshold applies per asset, not per business. You can purchase and write off multiple assets in the same financial year, provided each individual asset costs less than $20,000 (excluding GST for GST-registered businesses) and is installed ready for use before 30 June 2026.
What if the asset costs exactly $20,000?
The threshold is "less than $20,000", not "$20,000 or less". An asset costing exactly $20,000 (excluding GST) does not qualify for the instant write-off. It goes into the depreciation pool. If an asset is quoted at or near the threshold, check whether removing optional extras or negotiating the price down by even $1 changes the outcome.
How long does equipment finance approval take?
For straightforward chattel mortgage applications with clean documentation, our panel lenders typically approve within 24 to 48 hours. Settlement follows within a few business days after approval. For larger or more complex applications, allow 10 to 20 business days from application to settlement. If you are targeting a 30 June settlement, submit your application no later than mid-June.
Do I need to talk to my accountant before buying?
Yes. While this guide explains the general rules, the instant asset write-off interacts with your specific tax position, business structure, existing depreciation pool, and any other deductions you are claiming. Always confirm eligibility and model the tax impact with your accountant or tax adviser before committing to a purchase. Your broker handles the finance, your accountant handles the tax strategy, and together they ensure you get the best outcome.
