---
title: Instant Asset Write-Off for Machinery Buyers | HeavyBook
url: https://heavybook.com.au/tools/instant-asset-write-off/
description: "How the $20,000 instant asset write-off works for machinery: who qualifies, when a new or used machine fits under the limit, and how finance changes who claims."
---

# Instant Asset Write-Off for Machinery

Tax guide · ATO rules dated · not tax advice

If your business turns over less than **$10 million** and uses the simplified depreciation rules, you can deduct the business share of a machine, attachment or tool that costs less than **$20,000** in the year you first use it or install it ready for use. The limit has applied since 1 July 2023 and no longer has an end date: [an Act that became law](https://www.legislation.gov.au/C2026A00071/asmade) on 26 Aug 2026 made it permanent. Checked against the [ATO](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/instant-asset-write-off) on 1 Nov 2026.

## New or used, the cost decides

Of the **36** machines in our catalogue with a checked new price, **3** cost less than **$20,000** before GST: the Genie GS1932, the JLG 1930ES and the Skyjack SJ3219. The other **33** cost more, so a whole new machine from our guides goes into the small business pool instead: **15%** of its cost in the year you add it, then **30%** of the remaining balance each year.

Example: a new Kubota U17-3

Listed at **$29,950** before GST (AU dealer new-unit listing, checked 19 July 2026). For a GST-registered business with turnover under $10 million, using it fully for business, the pool deducts about **$4,493** in the first year and **$7,637** in the second. Later years depend on the rest of your pool: once the pool’s balance at the end of a year is below $20,000, [the whole balance is deducted](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/small-business-pool-calculations).

[Kubota U17-3 price guide](https://heavybook.com.au/excavators/kubota-u17-3-price/)

A used machine is tested on its own price. If it costs less than $20,000, the business share can be written off in full in the year you first use it. Check the [Excavator price guides](https://heavybook.com.au/excavators/) for what the machine you are looking at sells for.

## Attachments and add-ons

Buckets, hitches, trailers and tools bought as separate assets are tested on their own cost, so many fit under the limit. And if a machine was written off in full in an earlier year, a later addition to it under the limit, such as a new bucket, can be deducted in full too. That is the ATO’s own example.

## Buying on finance

Who can claim depends on who holds the machine for tax, not on how you pay. The limit test uses the machine’s full cost either way.

- **Chattel mortgage:** You own the machine from the day you buy it, so you hold it for tax and can claim the write-off, or the pool deduction above the limit.
- **Hire purchase:** Legal ownership passes at the final instalment, but for income tax the ATO treats the agreement as a purchase with a loan, so you are treated as the owner and can claim.
- **Finance lease:** The financier owns the machine for the whole lease, so it is not yours to write off.

Source: the ATO’s [Guide to depreciating assets](https://www.ato.gov.au/law/view/document?docid=SAV/DEPRECIATING) (who holds a depreciating asset).

To compare repayments on each structure, use the [machinery finance calculator](https://heavybook.com.au/equipment-finance/).

HeavyBook may receive a fee if you proceed with a broker we refer you to.

## Rules that trip people up

- The full cost must be under the limit, even when part of the use is private. You then deduct only the business share.
- Leave out the GST if your business can claim the GST credit on the purchase.
- A trade-in counts at the price before the trade-in credit.
- Used machines qualify, as well as new ones.
- The year that counts is the one you first use the machine or install it ready for use, not the year you buy it.
- Each asset is tested on its own, so several can be written off in one year if each is under the limit.

General information, not tax advice. Check your situation with your accountant or the [ATO](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/depreciation-and-capital-expenses-and-allowances/simpler-depreciation-for-small-business/instant-asset-write-off).

## Instant Asset Write-Off Questions

### Is the $20,000 instant asset write-off still available?

Yes. A business with aggregated turnover under $10 million that uses the simplified depreciation rules can deduct an asset costing less than $20,000 in the year it is first used or installed ready for use. The limit has applied since 1 July 2023 and has no end date: the Treasury Laws Amendment (Tax Reform No. 2) Act 2026 became law on 26 Aug 2026 and made it permanent. HeavyBook checked the ATO page on 1 Nov 2026.

### Can I use the instant asset write-off on an excavator?

Only if its cost is less than $20,000. If it costs that or more, it goes into the small business pool instead: 15% of its cost in the year you add it, then 30% of the remaining balance each year. A cheaper used machine, an attachment or a bucket under the limit can be written off in full.

### Does a used machine qualify for the instant asset write-off?

Yes. The ATO applies the write-off to new and second-hand assets alike, as long as the full cost is under the limit and your business meets the turnover test.

### Can I claim the write-off on a machine bought on finance?

It depends on who holds the machine for tax. With a chattel mortgage you own it from the start, so you can claim. A hire purchase is treated for income tax as a purchase with a loan, so the hirer is treated as the owner and can claim. Under a finance lease the financier owns the machine, so you cannot claim the write-off on it. The limit test uses the machine's full cost, however you pay for it.

### Do I include GST in the cost?

Not if your business is registered for GST and can claim the full GST credit: leave the GST out. If you are not registered for GST, the GST you paid is part of the cost.

### What happens when a machine costs more than the limit?

It goes into the small business pool: 15% of the business share of its cost in the year you add it, then 30% of the pool's balance each year after. When the pool's balance is below $20,000 at the end of a year, you can deduct the whole balance.

## Compare & Related

- [All buying tools](https://heavybook.com.au/tools/)
- [Machinery finance calculator](https://heavybook.com.au/equipment-finance/)
- [Fuel tax credit calculator](https://heavybook.com.au/tools/fuel-tax-credit-calculator/)
- [Running cost calculator](https://heavybook.com.au/tools/running-cost-calculator/)
- [Excavator price guides](https://heavybook.com.au/excavators/)