Tradie Instant Asset Write-Off 2025–26: What You Can Claim Before June 30

If you've been putting off buying a new ute, upgrading your tools, or investing in equipment for your trade business, the 2025–26 financial year gives you a compelling reason to act before 30 June 2026. The instant asset write-off currently allows eligible small businesses to deduct the full cost of assets up to $20,000 immediately — rather than depreciating them over several years.

After 30 June 2026, this threshold is scheduled to drop back to $1,000. That's a significant difference, and it makes the timing of major purchases genuinely important this financial year.

This guide explains exactly how the instant asset write-off works for tradies, what you can and can't claim, and how to use it correctly.

What Is the Instant Asset Write-Off?

Normally, when a business buys an asset with a useful life of more than one year — a vehicle, a major piece of equipment, machinery — the cost is claimed gradually over the asset's effective life through depreciation. A compressor with a 10-year effective life might be deducted at 10% per year.

The instant asset write-off is a special rule that lets eligible small businesses deduct the full purchase price of eligible assets in the year they're bought and first used. Instead of claiming $2,000 per year for 10 years on a $20,000 compressor, you claim the full $20,000 in year one.

For a tradie in the 30% tax bracket, a $20,000 deduction saves approximately $6,000 in tax — in the same year you buy the asset.

The 2025–26 Threshold: $20,000

For the 2025–26 financial year (1 July 2025 to 30 June 2026), the threshold is $20,000 per asset (GST-exclusive for GST-registered businesses, GST-inclusive for unregistered businesses).

This threshold applies per asset, not in total. You can buy multiple assets under $20,000 each and claim each one in full. A $15,000 piece of equipment and a $18,000 trailer can both be claimed in full in the same year.

The catch: from 1 July 2026, the threshold drops to $1,000 unless the government extends it again (as it has multiple times in the past). Any asset costing more than $1,000 purchased from 1 July 2026 onwards would need to be depreciated through the normal schedule.

Who Is Eligible?

To claim the instant asset write-off at the $20,000 threshold, your business must:

• Have an annual aggregated turnover of less than $10 million
• Purchase and first use (or install ready for use) the eligible asset between 1 July 2025 and 30 June 2026
• Use the asset for business purposes

The $10 million turnover threshold covers the vast majority of tradie businesses in Australia. If you're a sole trader, a small company, or a partnership, you almost certainly qualify.

What Tradies Can Claim

The instant asset write-off covers a wide range of purchases that tradies make regularly. The key test is that the asset must be used for business purposes and must cost less than $20,000 (GST-exclusive if you're registered for GST).

Tools and equipment: Power tools, hand tools, compressors, generators, welding equipment, pressure washers, and similar equipment used for trade work. Individual items under $20,000 each qualify.

Trailers: Work trailers, material trailers, and plant trailers used for business purposes.

Utes and work vehicles (with important conditions — see below): Vehicles used for work purposes.

Site equipment: Scaffolding, ladders, safety equipment, survey equipment, and testing instruments.

Technology: Laptops, tablets, and phones used for business. Job management software may also qualify if treated as a depreciating asset (though software subscriptions are generally operating expenses rather than assets).

Workshop equipment: Bench equipment, storage systems, charging stations, and workshop tools.

Utes and Vehicles: The Important Details

Vehicles are the biggest asset most tradies buy, and the rules have some nuances worth understanding.

Passenger vehicles (most standard cars, utes with a carrying capacity under 1 tonne) are subject to the car depreciation limit — currently $69,674 for 2025–26. Even though the instant asset write-off threshold is $20,000, the most you can write off a passenger vehicle is the car limit amount. A $35,000 family wagon used partly for work can't be fully written off regardless of the write-off rules.

Commercial vehicles (utes and vans with a carrying capacity of 1 tonne or more, or a gross vehicle mass over 4.5 tonnes) are exempt from the car depreciation limit. This is critical for tradies: a dual-cab ute with a 1-tonne+ payload qualifies as a commercial vehicle and the car depreciation limit doesn't apply. At $20,000 or under, the full cost can be written off immediately.

Most popular tradie utes — HiLux, Ranger, BT-50, Triton — have payload ratings above 1 tonne in their most common configurations, making them eligible commercial vehicles. Check the manufacturer specifications for your specific model and variant.

Work-use percentage: If a vehicle is used partly for personal purposes, only the work-use portion is deductible. A logbook kept for 12 continuous weeks establishes your work-use percentage. If your ute is used 85% for work and 15% personally, you can only claim 85% of the purchase price under the write-off.

What You Can't Claim

The instant asset write-off doesn't apply to everything. Key exclusions:

Assets costing $20,000 or more (GST-exclusive): These don't qualify for the write-off threshold and must be depreciated through the normal schedule or a small business pool.

Second-hand assets (in some circumstances): The $20,000 write-off applies to both new and second-hand assets for eligible small businesses — this is more generous than some previous years where only new assets qualified. Check the ATO's current guidance for any updates.

Assets used wholly for personal purposes: You can only claim the business-use portion. An asset that has zero business use cannot be claimed at all.

Trading stock: Items you buy to sell to customers are trading stock, not depreciating assets. Materials you buy and use up in the course of a job are generally operating expenses, not assets.

Land, trading stock, and certain intangibles: These are excluded from the write-off by definition.

How the Claim Works in Practice

If You're Registered for GST

The $20,000 threshold applies to the GST-exclusive price. If you buy a compressor for $19,800 including GST, the GST-exclusive price is $18,000 — well under the threshold. You claim the $18,000 as a deduction and separately claim the $1,800 GST as an input tax credit on your BAS.

If You're Not Registered for GST

The threshold applies to the total price including GST. A $19,800 purchase sits under $20,000, so it qualifies.

Where It Appears on Your Tax Return

For sole traders, the instant asset write-off is claimed as a business deduction on your individual tax return under the business income section. For companies, it appears on the company tax return. Your accountant or accounting software handles the correct categorisation.

Should You Buy Before 30 June?

The honest answer: only if you actually need the asset for your business.

The tax saving from the write-off is real — at a 30% marginal rate, a $20,000 deduction saves $6,000. But spending $20,000 you don't have the cash for, or buying equipment you don't genuinely need, to get a $6,000 tax saving is poor financial reasoning. You're still out of pocket $14,000.

The write-off makes sense when:

• You genuinely need the asset for current or upcoming work
• You have the cash available without straining your operating buffer
• You've been deferring the purchase and this is a good time to bring it forward
• The purchase will generate more income than it costs (a better compressor that lets you take on more jobs, for example)

The write-off doesn't make sense when:

• You're buying purely for the tax benefit without a genuine business need
• You'd be taking on debt specifically to access the deduction
• The purchase would leave your business cash-strapped

Talk to your accountant before making a major purchase to understand the full tax and cash flow implications for your specific situation.

The Deadline Is Real

The 30 June 2026 deadline for the $20,000 threshold is set in legislation. The asset must be first used or installed ready for use before that date — not just ordered or deposited on. If your new ute is ordered in May 2026 but delivered in July 2026, it doesn't qualify for the current financial year's write-off.

If you're considering a significant purchase that qualifies, factor in delivery lead times. Tradies trying to take advantage of this before EOFY often find suppliers and dealers very busy in May and June.

Keeping Records

You must keep records that show:

• The purchase price of each asset
• The date of purchase and when it was first used for business
• The business purpose of the asset
• Receipts or tax invoices

For vehicles, keep your logbook to substantiate the business-use percentage claimed. For all assets, keep the purchase receipt or tax invoice in digital or paper form for at least five years after your last claim.

Tradie Money AU provides practical financial guidance for Australian tradies. This article reflects the rules as of the 2025–26 financial year — always confirm current thresholds with the ATO or a registered tax agent, as legislation can change. This is general information only, not tax advice.