$20,000 Instant Asset Write-Off Extension

Accounting, Australian Taxation Office, Finance, Queensland Government, Starting a Business, Taxation

Small Business Support: $20,000 Instant Asset Write-Off Extension

Great news for small businesses! As part of the 2024–25 Budget, the government announced that it will continue supporting small businesses by extending the $20,000 instant asset write-off limit until 30 June 2025. This measure has now officially become law, allowing eligible businesses to maximize tax deductions and reinvest in their operations.

What Does This Mean for Small Businesses?

Under this measure, small businesses with an aggregated turnover of less than $10 million can deduct the full cost of eligible depreciating assets costing less than $20,000, provided they are first used or installed ready for use between 1 July 2024 and 30 June 2025.

Additionally, businesses can deduct an amount included in the second element (cost addition) of an eligible depreciating asset’s cost, incurred between 1 July 2024 and 30 June 2025, if:

  • The asset was previously written off under simplified depreciation rules in a prior income year.
  • The amount is the first addition to the second element cost incurred after the end of the income year in which the asset was written off.
  • The amount is less than $20,000.

Key Benefits and Eligibility

One of the biggest advantages of this measure is that the $20,000 limit applies per asset, meaning small businesses can instantly write off multiple assets, providing greater flexibility in managing expenses and upgrading essential equipment.

The flipside of the instant asset write off is that when the assets are sold the full sale price excluding GST will be considered a taxable gain on sale of plant/equipment.

For assets valued at $20,000 or more, businesses can continue to depreciate them.

What’s Next?

This confirmation of this extension is a boost for small businesses, allowing them to invest in necessary tools, technology, and equipment while benefiting from immediate tax deductions. Business owners should start reviewing their asset purchase plans to ensure they maximize these tax advantages before the 30 June 2025 deadline. From 1 July 2025 only assets less than $1,000 will be eligible for immediate write off.

Are you planning to make use of this extension? Now’s the time to strategize and optimise your tax benefits!  Need assistance, please reach out to one of our friendly staff members on 07 5494 9173.