Instant Asset Write-Off
Q. What has been announced?
From 1 July 2026, eligible small businesses with aggregated turnover of less than $10 million can permanently access the $20,000 instant asset write-off for eligible assets costing less than $20,000.
Rather than depreciating these assets over several years, eligible businesses can claim the deduction upfront.
Importantly, making the $20,000 threshold permanent gives small businesses greater certainty when planning future purchases and investment.
Q. What types of assets could be covered?
Subject to the eligibility rules, the instant asset write-off can apply to business assets such as:
- vehicles
- office equipment
- computers and technology
- tools and machinery
Assets costing $20,000 or more may still be added to the small business simplified depreciation pool and depreciated under the usual rules.
Q. What does this mean for your business?
If you’re planning to purchase new equipment, technology, vehicles or other business assets, the permanent write-off may help with tax and cash flow planning.
However, an immediate tax deduction shouldn’t be the sole reason for making a purchase. Consider whether the asset is right for your business, how it will be funded and the overall impact on your cash flow.
If you’re considering a significant business purchase, speak with us about the tax implications and timing before you proceed.
Business Tax and Investment Changes
Several business tax measures have also been announced, with changes aimed at supporting cash flow, early-stage businesses and business investment.
Q. What is changing with tax loss carry-back rules?
From 1 July 2026, eligible companies with aggregated annual global turnover of less than $1 billion will be able to carry back revenue losses and offset them against tax paid up to two years earlier.
For businesses experiencing a period of lower profitability or a loss after previously profitable years, this could provide access to a tax refund sooner and help support short-term cash flow.
The rules won’t apply to every business or every loss, so eligibility will need to be considered based on your circumstances.
Q. What is changing for start-up tax losses?
From 1 July 2028, eligible start-ups with turnover below $10 million will be able to convert eligible tax losses from their first two years into a refundable tax offset.
The refund will be capped based on the amount of FBT and withholding tax paid on wages for Australian employees in the loss year.
For eligible early-stage businesses, this could provide additional cash flow at a time when the business is investing in growth but may not yet be profitable.
Q. What is changing with electric vehicle tax concessions?
The current Fringe Benefits Tax (FBT) exemption for eligible electric vehicles will gradually be scaled back based on vehicle value.
Under the proposed changes:
- eligible EVs valued over $75,000 will move to a 25% FBT discount from 1 April 2027
- eligible EVs valued at $75,000 or less can continue to receive the full FBT exemption where the commitment to provide the vehicle is made before 1 April 2029
- from 1 April 2029, a permanent 25% FBT discount will apply to all eligible EVs
If your business provides EVs to employees or you’re considering purchasing an EV through your business, the changes could affect the tax benefit and overall cost. Before bringing forward a purchase purely to access the existing concession, consider the vehicle cost, financing, cash flow and tax implications together.
Foreign Investment
Q. What is changing for foreign investors buying residential property?
Foreign investors are generally prohibited from purchasing established residential properties in Australia until 30 June 2029, extending the restrictions that commenced on 1 April 2025.
The measure is intended to support housing availability for Australian buyers, while continuing to direct foreign investment towards new housing supply.
Limited exceptions apply, including certain investments that support an increase in Australia’s housing supply.
For most Australian home buyers, the change requires no action. However, foreign purchasers should confirm their eligibility and understand the rules applying to new versus established properties before entering into a purchase.
Source: MFAA (Mortgage Federation Assoc of Aust) and NTAA
Seek advice
Always speak to the Financially Sorted team before making decisions based on the new legislation.