The end of the financial year is the busiest few weeks of the year for tradies buying tools, trailers and vehicles — and the instant asset write-off is the reason why. With 30 June 2026 now only weeks away, it’s worth knowing exactly what you can claim, what the limits are, and how to fund a purchase without draining the cash you need for the quieter winter months.
This guide breaks down the 2025–26 rules in plain English for sole traders, partnerships and small companies in the trades.
What the instant asset write-off actually is
The instant asset write-off lets an eligible small business immediately deduct the business-use portion of an asset in the year it’s first used or installed ready for use — rather than depreciating it a little at a time over several years.
In practical terms: instead of claiming a fraction of a $12,000 trailer each year, you claim the whole business-use portion in this year’s tax return. That brings the deduction forward, which can meaningfully reduce your taxable income for 2025–26.
It is a timing benefit, not free money. You’re still spending the cash (or financing it) — the write-off simply changes when you get the deduction.
The 2025–26 numbers
For the 2025–26 financial year the rules are:
- Threshold: $20,000 per asset, excluding GST. If you’re registered for GST, the $20,000 test is applied to the GST-exclusive price.
- It’s per asset, not a total cap. A tradie can write off multiple assets — a $9,000 trailer, a $4,500 generator and a $7,000 tool fit-out can each qualify in the same year.
- Turnover under $10 million. Your business needs an aggregated annual turnover below $10 million to use the small-business simplified depreciation rules.
- Installed ready for use by 30 June 2026. The asset must be first used, or installed and ready to use, between 1 July 2025 and 30 June 2026 to be claimed on your 2025–26 return.
That last point is the one that catches people out. Buying an asset isn’t enough — if a machine is sitting in a crate on 30 June and isn’t ready to use, it generally can’t be claimed this year.
One more thing for next year: the 2026 Federal Budget confirmed the $20,000 write-off is becoming a permanent feature of the tax system from 1 July 2026. So this is no longer a one-off scramble — but the 2025–26 window still closes on 30 June, and claiming in this year’s return still depends on the asset being ready to use by then.
What tradies typically claim
Assets that commonly fall under the $20,000 (ex-GST) threshold for trades businesses include:
- Power tools, nail guns, compressors and battery systems
- Trailers and box trailers
- Generators, welders and site equipment
- Office and IT gear used for the business — laptops, accounting software hardware, job-management tablets
- Tool storage, racking and ute fit-outs
A work ute or truck is often over $20,000, so it usually won’t qualify for the instant write-off in full. That doesn’t mean you miss out — larger vehicles can still be depreciated, and there may be other concessions. This is exactly the kind of call worth running past your accountant before you buy.
Write-off vs financing: you can do both
A common myth is that you have to pay cash to claim the instant asset write-off. You don’t.
If you buy an eligible asset using a chattel mortgage or equipment loan, you can generally still claim the instant asset write-off on the full business-use cost in the year it’s installed ready for use — even though you’re paying the lender back over time. You may also be able to claim the interest portion of your repayments as a deduction.
That’s a genuinely useful combination for cash flow: you get the upfront deduction this financial year, but you keep your working capital in the business and spread the actual cost across future jobs.
A quick worked example for a sole trader:
Mick, a self-employed electrician, buys a $13,200 trailer fit-out (about $12,000 ex-GST) on 18 June and has it on the road the same week. He finances it rather than paying cash. Because it’s installed ready for use before 30 June and sits under the $20,000 threshold, he can claim the $12,000 business-use portion as a deduction in his 2025–26 return — while his repayments come out of next year’s jobs. If his marginal tax rate is 30%, that deduction is worth roughly $3,600 off his tax bill, without touching the cash he’s keeping aside for winter.
Numbers are illustrative only — your benefit depends on your turnover, business-use percentage and tax position.
Don’t let timing cost you the claim
With the deadline close, three things matter most:
- Order early enough to take delivery. Lead times on trailers and equipment blow out in June. “Installed ready for use” is the test, not the order date.
- Get finance pre-approved. If you’re financing, having approval in place means you’re not waiting on paperwork while the clock runs down. As a trade-focused broker, Tradie Finance works with self-employed and ABN-only applicants every day, including low-doc situations.
- Talk to your accountant about the business-use split. If an asset is used partly for private purposes, you only claim the business-use portion.
If you’re weighing up a tool, trailer or equipment purchase before 30 June, our business and equipment finance team can get approval sorted quickly. If it’s a vehicle, see our ABN car loan and low-doc loan options, and for heavier gear our truck finance page covers the bigger-ticket buys.
Frequently asked questions
What is the instant asset write-off for 2025–26?
It’s a tax concession that lets eligible small businesses (aggregated turnover under $10 million) immediately deduct the business-use portion of an asset costing less than $20,000 excluding GST, provided it’s first used or installed ready for use between 1 July 2025 and 30 June 2026.
Can a sole trader claim the instant asset write-off?
Yes. Sole traders running a business with aggregated turnover under $10 million can use the instant asset write-off, as long as the asset is eligible, under the threshold and installed ready for use in the financial year.
Does the $20,000 limit include GST?
For GST-registered businesses, the $20,000 threshold is applied to the GST-exclusive cost of the asset. If you’re not registered for GST, you use the GST-inclusive cost.
Can I claim the write-off if I finance the asset?
Generally yes. Financing an eligible asset with a chattel mortgage or equipment loan doesn’t stop you claiming the instant asset write-off in the year it’s installed ready for use, and the interest on repayments may also be deductible. Confirm the specifics with your tax agent.
What’s the deadline?
To claim it in your 2025–26 return, the asset must be first used or installed ready for use by 30 June 2026 — not simply ordered or paid for.
The write-off is only one piece of your EOFY return — see our full guide to tax deductions for tradies for everything else you can claim, from tools to ute running costs.
Written and reviewed by the Finance Director at Tradie Finance.
This article is general information only and does not constitute credit, financial or tax advice. It does not take into account your personal objectives, financial situation or needs. Tax outcomes depend on your individual circumstances — seek advice from a registered tax agent and consider whether the information is appropriate for you before acting. Tradie Finance operates under Australian Credit Licence 506065 (Five Tees Pty Ltd). Lending is subject to approval, lending criteria, terms, conditions and fees.