Home · Guides

Instant Asset Write-Off 2026-27: $20,000 Now Law

Updated 17 October 2026 · General information · 3 min read

General information only, not tax or financial advice. This site is not the ATO. Check ato.gov.au or ask a registered tax agent. Last checked against ATO and Parliament sources: 17 October 2026. Examples use made-up numbers. Dates and amounts marked uncertain should be re-checked.

Short answer: The ATO says the $20,000 instant asset write-off (IAWO) is now law. The Treasury Laws Amendment (Tax Reform No. 2) Act 2026 (Royal Assent 26 August 2026, as reported by the ATO) amends the small business depreciation rules from 1 July 2026. Eligible small businesses can deduct the business portion of eligible depreciating assets costing less than $20,000 that are first used or installed ready for use in the income year.

The rule, as the ATO describes it

• Who: businesses with aggregated turnover under $10 million that use the simplified depreciation rules.
• What: the business portion of the cost of eligible assets under $20,000.
• Per asset: the $20,000 limit applies to each asset, so more than one asset can be written off.
• New and second-hand assets can be eligible. Exclusions and limits still apply.
• Upgrades: an immediate deduction may be possible for eligible improvements costing less than $20,000.
• Claim it in the tax return for the year the asset is first used or installed ready for use.
• The ATO describes the measure as permanent from 1 July 2026. Parliament's Schedule 2 changes the threshold from $1,000 to $20,000 for assets first used or installed on or after 1 July 2026. Earlier $20,000 limits were temporary extensions. A later parliament could legislate again.

Not covered here

• The full cost must be less than $20,000. A cost of $20,000 or more goes to the pool: see the pool page.
• Trade-ins: the ATO says to use the purchase price before any trade-in credit.
• Cars have a separate car limit. The 2026-27 limit was not verified. An ATO example for 2025-26 cites $69,674, which is not a figure for 2026-27.
• Leasing and other excluded assets: check the ATO. The exclusions list was not re-read in full.
• Whether the $20,000 test is GST-inclusive or GST-exclusive for your registration status was not verified.

The write-off helper applies the under-$20,000 test, the 1 July 2026 to 30 June 2027 window, and a business-use percentage you enter. It refuses cars, leases and assets outside the simplified rules.

Questions

Is it permanent?

The ATO says the measure is permanent from 1 July 2026, and that it is now law. A future government could change the law. This page cannot say the threshold stays at $20,000 after later budgets.

Does the 2025-26 rule matter?

For assets first used in 2025-26, the earlier temporary extension applied. This page is about assets first used or installed from 1 July 2026.

What we could not verify