Proposed Temporary Increase to the Instant Asset Write-Off

Under current law, the small business instant asset write-off threshold is (less than) $1,000 for the 2024 income year.

However, the Government announced in last year’s Budget that it would temporarily set the instant asset write-off threshold for small business entities at (less than) $20,000 for the 2024 income year, and it recently announced, as part of the 2024/25 Budget, that this temporary threshold would be extended to the 2025 income year.

If this measure becomes law, small businesses with an aggregated annual turnover of less than $10 million will generally be able to immediately deduct the full cost of eligible assets costing less than $20,000 that are first used or installed ready for use by 30 June 2025. The asset threshold applies on a ‘per asset’ basis, so small businesses can instantly write off multiple assets.

From 1 July 2025, the instant asset write-off threshold will revert back to (less than) $1,000.

The Treasury Laws Amendment (Support for Small Business and Charities and Other Measures) Bill 2023 was first introduced in September 2023. It has not yet been passed, and the Senate recently attempted to amend it to increase the small business instant asset write-off threshold from $20,000 to $30,000, and expand the concession to include medium-sized businesses with an aggregated turnover of less than $50 million.

However, the House of Representatives has not accepted these amendments, and it is now not clear when (or if) this Bill will become law.

Ref: 2024/25 Federal Budget Paper No 2, 14 May 2024