Expansion of the Instant Asset Write-Off Scheme: Encouraging Business Investment

Australia’s Instant Asset Write-Off scheme has seen significant changes in recent years, aimed at balancing driving economic growth with curbing inflation. As of February 2025, the scheme has expanded to include businesses with an annual turnover of up to $10 million, doubling the previous threshold of $5 million. This expansion allows more small and medium-sized businesses (SMEs) to immediately write off the full cost of eligible assets purchased during the year.

Under the Instant Asset Write-Off scheme, businesses can immediately deduct the full cost of new assets such as machinery, technology, equipment, and vehicles, instead of depreciating the asset over several years. This immediate deduction can result in substantial tax savings in the year the asset is purchased, improving cash flow and reducing tax liabilities. For small businesses, this provision can provide much-needed financial relief, particularly during uncertain economic times.

For business owners, the expanded write-off scheme offers an opportunity to make investments that may have otherwise been delayed. This could include purchasing new vehicles to expand delivery services, upgrading computer systems, or acquiring essential machinery. While the scheme offers tax relief, business owners should consult with their accountants or tax professionals to ensure they are maximizing its benefits while remaining compliant with tax regulations.

To discuss your personal circumstances and the specifics of the Assets in mind, please contact us on (03) 9775 5700.