The $20,000 instant asset write-off is not law, and the year it covers is already running

If you are about to buy an espresso machine, a new set of chairs or a treatment bed, here is the honest position: nobody can tell you today what that purchase is worth in tax. The $20,000 instant asset write-off ran out on 30 June 2026, and the replacement announced in the May Budget has not passed Parliament. The threshold actually written in the law right now, for the year you are trading in, is $1,000. This page covers what that does to your cash, what it does not do, and the one move that could genuinely cost you if you get it wrong.

Where this stands today

You have used a $20,000 write-off for the last three years. It expired on 30 June 2026.

On 12 May 2026, in the 2026-27 Budget, the government said it would make $20,000 permanent from 1 July 2026. That announcement is not law. The tax office says so in its own words, on its own page about the measure: "This measure is not yet law."

So the number sitting in the legislation today is $1,000. The Parliamentary Library puts it plainly in its analysis of the bill: absent the amendment, the threshold "would revert to $1,000 from 1 July 2026".

Here is the detail that tells you how odd this is. The ATO publishes a table of write-off limits by date. The newest row reads "1 July 2023 to 30 June 2026: $20,000". There is no row after it. You are trading in a financial year the table does not cover.

Three things reverted, not one

Almost all the coverage mentions the $20,000. Two other numbers moved with it, and the third one is the one that can actually hurt.

The write-off threshold: $20,000 down to $1,000. An asset costing $1,000 or more now goes into your small business pool instead of being deducted in full. Note the wording is less than the threshold, so an asset costing exactly $20,000 never qualified anyway.

The low pool value threshold: $20,000 down to $1,000. Leftover bits of assets sit in one bucket called your small business pool. Under the old rule, if that bucket was worth less than $20,000 at year end you could write off the whole thing and be done with it. That threshold dropped to $1,000 as well. A pool sitting at $8,000 next June, which you would have cleared in one go, now keeps depreciating instead.

The five-year lock-out came back. There is a rule that says if you opt out of the simplified depreciation rules, you cannot re-enter for five years. It has been switched off since 2015. The switch-off ran to 30 June 2026, and the extension to 30 June 2027 sits in the same unpassed bill. So right now that lock-out is live. This is the one to be careful about, because it is a door that shuts behind you.

What it costs you, on a real machine

Say you install a $15,000 espresso machine in August 2026. That is the cost excluding GST, assuming you are registered and claim the full credit.

If the bill passes as drafted, backdated to 1 July 2026, you deduct the whole $15,000 in 2026-27.

If it does not, $15,000 is well over $1,000, so the machine goes into your small business pool and depreciates at 15% in the first year. That is a deduction of $2,250.

Difference in year one: $12,750 of deductions. If you trade through a company on the 25% base rate, that is $3,187.50 of tax.

Now the part the headlines skip. That $3,187.50 is not money you lose. It is money you pay later. The pool keeps depreciating at 30% a year after the first year, so across the life of the machine you deduct the same $15,000 either way. What changes is when, not whether.

So should you wait and see?

Probably not, and the reasoning matters more than the answer.

The bill is written to apply from 1 July 2026. If it passes in September, or November, it still covers the machine you install this month. You are not racing a deadline. There is no date in the next few months where installing earlier or later makes the deduction better or worse.

Your 2026-27 return is not lodged until after 30 June 2027 anyway. The law will almost certainly have settled by then.

How likely is it to pass? The Parliamentary Library notes that Schedules 1 and 2 of the bill "appear to be widely supported". That is not a guarantee, and it is not law until it is law. But the realistic risk here is delay, not reversal. The next real signal is the Senate Economics Legislation Committee, which reports by 13 August 2026.

What you should not do is spend the tax saving before it exists. If you cut your PAYG instalments on the assumption of a $15,000 deduction and the threshold stays at $1,000, you have created a bill you did not budget for.

What this does to what your business is worth

Depreciation gets added back when a buyer works out your owner earnings or EBITDA. So writing an asset off quickly does not lower your sale price, and dragging it out does not raise it. On the valuation itself, this whole argument is a wash.

The risk is behavioural, and it runs in both directions.

Owners who freeze on equipment decisions while they wait for certainty turn up to a sale with a tired fit-out. A buyer prices that immediately: they see a machine on its last legs and take the replacement cost off the offer, or use it as the reason your multiple should be lower. Deferred capital spending is one of the easiest things for a buyer to put a number on and one of the hardest for a seller to argue away.

The opposite trap is kit bought only for the deduction. A machine that does not earn is still an asset the buyer has to look at, and "we bought it for the tax" has never supported a price.

The short version

The threshold decides when you get the deduction. It does not decide whether. Buy the machine if the machine earns. Keep your paperwork tight. Leave your instalments alone until the bill passes.