Instant asset write-off for 2026-27: what is law and what is only announced

As at 12 July 2026 there is no legislated $20,000 instant asset write-off for 2026-27: under enacted law the threshold reverted to the $1,000 statutory default for depreciating assets first used, or first installed ready for use, from 1 July 2026. The 2026-27 Federal Budget announced a permanent $20,000 threshold from 1 July 2026 and the implementing bill is before Parliament — but it has not been passed, so purchase decisions made now should be assessed on the $1,000 enacted threshold.

Key points:
- 2025-26 is settled law: eligible small businesses can immediately deduct [depreciating assets](/technical-resources/glossary#depreciating-asset) costing less than **$20,000** each that were first used or installed ready for use on or before **30 June 2026** — enacted by Act No. 72 of 2025 (assent 4 December 2025).
- From 1 July 2026 the enacted threshold is the **$1,000** statutory default in paragraph 328-180(1)(b) of the Income Tax Assessment Act 1997, confirmed in the compilation in force at 27 June 2026.
- The 2026-27 Budget (12 May 2026) announced a permanent $20,000 threshold from 1 July 2026; the implementing Treasury Laws Amendment (Tax Reform No. 2) Bill 2026 is before Parliament, with a Senate committee report due **13 August 2026** — it is not yet law.
- Eligibility requires a small business entity (aggregated turnover under $10 million) that has chosen simplified depreciation for the relevant years; the threshold applies **per asset**, so several assets can each qualify.
- If the $1,000 default stands, assets costing $1,000 or more go into the general small business pool (15% first year, then 30% of the opening balance), the $20,000 low-pool-value write-off lapses, and the suspension of the five-year lock-out rule ends.
- Parliament has legislated these thresholds late before — the 2025-26 extension received assent five months into that income year — but past retrospective fixes are no promise for 2026-27.