⚠️ URGENT — Deadline 30 June 2026

If you have been thinking about buying tools, equipment or a work vehicle — do it before 30 June 2026. The instant asset write-off threshold drops from $20,000 to $1,000 on 1 July 2026. That is one of the biggest tax changes affecting Australian tradies in years, and you have weeks left to take advantage of it.

📋 In This Article

  1. →What is the instant asset write-off?
  2. →The 30 June 2026 deadline
  3. →What qualifies — and what doesn't
  4. →Real examples for tradies
  5. →What to buy before 30 June
  6. →How to claim it
  7. →Does it apply to vehicles?
  8. →FAQs

What is the Instant Asset Write-Off?

The instant asset write-off lets eligible small businesses claim the full cost of a qualifying asset as a tax deduction in the year they purchase it — instead of depreciating it over several years. For a tradie in the 32.5% tax bracket buying a $15,000 piece of equipment, that is a $4,875 tax saving in the current financial year rather than a few hundred dollars per year spread across 5–7 years.

It applies to businesses with aggregated annual turnover under $10 million — which covers the vast majority of self-employed tradies and small trade businesses in Australia.

The numbers: A $15,000 tool purchase at the 32.5% marginal rate saves you $4,875 in tax this financial year under the write-off. After 1 July 2026, only the first $1,000 qualifies — saving $325. The difference is $4,550 in tax savings that disappear on 1 July.

The 30 June 2026 Deadline — What Changes

PeriodWrite-Off ThresholdTax Saving on $15,000 Purchase
Now → 30 June 2026$20,000$4,875 (at 32.5%)
1 July 2026 onwards$1,000 only$325 on first $1,000, rest depreciated

The asset must be first used or installed ready for use by 30 June 2026. Simply ordering it before 30 June is not enough if it has not been delivered and put into use. If you order something in late June, make sure it arrives and you can demonstrate it was ready to use before 30 June.

Important: "Installed ready for use" is the ATO's test — not the purchase date, not the invoice date. The asset must physically be in your possession and ready to use by 30 June 2026. Order early enough to guarantee delivery.

What Qualifies — and What Doesn't

Generally qualifies:

  • Individual tools and equipment under $20,000 each
  • Work vehicles (utes, vans, trucks) — subject to the luxury car limit
  • Trailers and towing equipment
  • Computers, tablets and phones used for business
  • Safety equipment and PPE
  • Scaffolding and access equipment
  • Ladders, compressors, generators
  • Workshop equipment and machinery

Does NOT qualify:

  • Assets used 50% or less for business (you can only claim the business-use portion, and below 50% business use the instant write-off does not apply)
  • Assets costing $20,000 or more each (the $20,000 threshold is per asset, not total spend)
  • Horticultural plants and some specific excluded assets
  • Buildings and capital improvements to land

Real Examples for Tradies

PurchaseCostQualifies?Tax Saving (32.5%)
New tool kit$4,500✓ Yes$1,463
Scaffolding set$8,000✓ Yes$2,600
Work trailer$12,000✓ Yes$3,900
Laser level + accessories$1,800✓ Yes$585
Compressor + hoses + guns$3,200✓ Yes$1,040
Work laptop + software$2,400✓ Yes (business %)$780
Single machine > $20,000$25,000✗ DepreciateSpread over years

What to Buy Before 30 June — Practical Checklist

Think about any tools, equipment or assets you have been putting off buying. If you genuinely need it for your business and it costs under $20,000, buying it before 30 June 2026 gets you the full deduction this year instead of a fraction per year over the asset's life.

  • Ageing tools that need replacing — if your drills, saws or diagnostic equipment are due for an upgrade, now is the time
  • Safety equipment — harnesses, height safety systems, eye and ear protection
  • Work vehicle accessories — ute tray, toolbox, racking system, tow bar
  • Technology — laptop, tablet, business phone
  • Workshop equipment — bench grinder, press, storage systems
  • Trailer — if you have been getting by without one

Don't buy things you don't need just for the tax deduction. A $10,000 tool you don't need saves you $3,250 in tax but costs you $6,750. Only buy what your business genuinely needs — the tax saving is a bonus, not the reason to buy.

How to Claim It in Your Tax Return

  1. Buy and put into use before 30 June 2026 — keep the invoice/receipt
  2. Record in your accounting software as a fixed asset purchase — Xero and MYOB both handle this correctly
  3. Capture the receipt — use Dext to photograph and store it immediately
  4. Tell your accountant — mention every eligible purchase so they apply the write-off correctly in your return
  5. Keep the record for 5 years — the ATO can audit write-offs, especially for high-value items

Does the Instant Asset Write-Off Apply to Work Vehicles?

Yes — but with conditions. The $20,000 threshold applies per asset, so a vehicle costing under $20,000 qualifies in full. However, most new utes, vans and work vehicles cost significantly more than $20,000.

For vehicles over $20,000, the luxury car limit applies. For 2025–26, the car limit is $69,674 — meaning for a vehicle below this price, you can claim depreciation on the full cost using the standard small business depreciation rules, but not the full instant write-off in year one.

Talk to your accountant before buying a vehicle — the tax treatment depends on the cost, business-use percentage and the depreciation method that gives you the best result.

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→ Free ute loan repayment calculator →

Can I buy multiple assets under $20,000 each and claim them all?

Yes — the $20,000 threshold applies per individual asset, not to your total spend. You can buy ten different tools each costing under $20,000 and claim the full cost of each one. The threshold is not a cap on total claims — it is a per-asset limit.

What if my business turnover is over $10 million?

The $20,000 instant asset write-off applies to businesses with aggregated annual turnover under $10 million. The vast majority of self-employed tradies and small trade businesses qualify. If you are close to the $10 million threshold, check with your accountant.

What happens to assets I buy after 1 July 2026?

From 1 July 2026, the instant asset write-off threshold reverts to $1,000. Assets costing more than $1,000 will need to be depreciated over their effective life using standard depreciation rules rather than being written off in year one. This significantly reduces the upfront tax benefit of large equipment purchases.

Do I need to use the asset only for business to claim it?

No — but you can only claim the business-use portion. If you buy a tool used 80% for business and 20% privately, you claim 80% of the cost. If business use is 50% or below, the instant asset write-off does not apply. If it is 100% business use, you claim the full cost.

The $1,000 standard deduction is also changing from July 2026 — how does this affect tradies?

The Australian Government has proposed a $1,000 standard work-related expense deduction from 1 July 2026. However, for most tradies whose deductions significantly exceed $1,000, claiming actual expenses will still produce a far larger deduction. The standard deduction is only beneficial for people with very few work-related expenses. Tradies with proper records and legitimate deductions should always claim actual costs.