Extended Instant Asset Write-off for Small Businesses 2025
As part of the 2024 Federal Budget, the Federal government has announced a one-year extension to the instant asset write-off threshold, increasing it to $20,000. Originally set to expire on 30 June 2024, this extension allows small businesses to immediately deduct the cost of eligible assets on their 2024-25 income tax return.
Eligibility Criteria
To qualify for the instant asset write-off, businesses must meet these conditions:
The asset must be first installed or ready for use between 1 July 2024 and 30 June 2025.
The asset must cost less than $20,000.
The business must have an annual aggregated turnover of less than $10 million.
The $20,000 threshold applies per asset, enabling businesses to write off multiple assets.
Examples:
Trade Industries: Tools, machinery, or work vehicles costing less than $20,000 each. For example, electricians can write off new voltage testers or plumbers might deduct new pipe bending tools.
Beauty Industry: Salon equipment such as hairdressing chairs, styling stations, or advanced skincare devices. A salon could instantly write off a new set of professional hairdryers or manicure stations.
Professional Services: Office equipment like computers, printers, or specialized software. Law firms or consulting agencies might deduct new laptops or project management software that streamline operations.
Assets Over the Threshold
Assets valued at $20,000 or more are not eligible for immediate deduction but can be added to the small business simplified depreciation pool. These assets will depreciate at 15% in the first income year and 30% in subsequent years.
Next Steps
Small businesses should continue the practice from previous years by taking immediate deductions for assets eligible under the instant asset write-off. The lockout rules, which prevent small businesses from re-entering the simplified depreciation regime for five years after opting out, will remain suspended until 30 June 2025.
For further inquiries or specific advice on how to leverage this extension within the trade, beauty, or professional services industries, please contact our office. We are here to help you make the most of these changes for the benefit of your business.