Say goodbye to the instant asset write off

From Tuesday, 1 July 2025, the government will be making significant changes to the instant asset write-off scheme for small businesses.

Instant Asset Write-Off Threshold Reduced

  • The instant asset write-off threshold will revert to the original amount of $1,000
  • This means only assets costing $1,000 or less (excluding GST, if registered) will be eligible for an immediate deduction

Depreciation of Higher-Value Assets

  • Assets over $1,000 will no longer be eligible for immediate write-off
  • Instead, they must be added to the general small business depreciation pool and depreciated as follows:

– 15% deduction in the first year (regardless of purchase date within the year)

– 30% deduction each year after

Low-Value Pool Write-Off Removed

  • Previously, businesses could write off the entire balance of their small business pool if it was below $20,000. From 1 July 2025, this option will no longer be available. Pool balances under $20,000 must continue to be depreciated annually

Action Before 1 July 2025

If your business is considering purchasing assets over $1,000, it may be financially beneficial to make eligible purchases before 30 June 2025 to take advantage of the current (higher) instant asset write-off threshold.

 

Author

Natasa Briffa