Small business – $20,000 instant asset write-off
The Treasury Laws Amendment (Tax Incentives and Integrity) Act 2025External Link has extended the $20,000 instant asset write-off limit to the 2025-26 income year. The measure aims to support small business entities with an aggregated annual turnover of less than $10 million.
Eligible small business entities can immediately deduct the business use portion of the cost of eligible depreciating assets costing less than $20,000. You must first use the depreciating asset, or install the depreciating asset ready for use, for a taxable purpose between 1 July 2025 and 30 June 2026.
The $20,000 limit applies on a per asset basis, so small business entities can instantly write off multiple assets. Small business entities can also immediately deduct an eligible amount included in the second element of a depreciating asset's cost.
The 5-year 'lock out' rule is suspended until 30 June 2026. This rule prevented small business entities from re-entering the simplified depreciation regime if they opted out.
For more information, see Small business support – $20,000 instant asset write-off.
Effective life determinations
Our effective life determinations are available in the, Income Tax Assessment (Effective Life of Depreciating Assets) Determination 2025 (LI 2025/20), which is a legislative instrument that has the full force of the law under the Legislation Act 2003External Link.
Work out the decline in value of a depreciating asset on the basis of its effective life. You can either make your own estimate of its effective life or use the Commissioner's effective life determinations. For more information, see Effective life of an asset.
Continue to: Uniform capital allowances
Return to: Guide to depreciating assets 2026