The Instant Asset Write-Off and Your Farm Machinery: What to Get Right Before 30 June
I grew up on a wheat farm at Terry Hie Hie, out past Moree. My old man farmed, I boarded at Farrer in Tamworth, and I learned early that on the land the money does not arrive in neat monthly lumps. It comes off the header, once or twice a year, and everything in between is timing.
So when people talk about the instant asset write-off at this time of year, I know what a grower is really asking: can I bring forward the gear I need, and does the tax actually help. Here is the honest version, including the part the headlines skip.
What the instant asset write-off actually is
If your farm business has an aggregated turnover under $10 million, you can immediately deduct the full cost of an eligible asset that costs less than $20,000, instead of depreciating it over several years. The limit is per asset, so you can write off more than one.
It covers both new and second-hand gear, and the asset has to be first used or installed ready for use between 1 July 2025 and 30 June 2026. For smaller items, a quad bike, a smaller implement, workshop tools, some equipment under the cap, it is a clean, immediate deduction.
The part the headlines skip
You cannot instantly write off a $300,000 header. The $20,000 cap is per asset, and most tractors, headers and big machinery cost far more than that. So the instant write-off does not apply to the big-ticket gear most growers are actually financing.
That does not mean there is no tax benefit. It means a bigger machine is depreciated rather than written off in one hit. Anyone who tells you to "write off your new tractor" before June 30 is overselling it. The real levers are below.
How bigger machinery is really claimed
Depreciation. Machinery over $20,000 is written down over time. Many small farm businesses use the simplified depreciation pool, which front-loads the deduction in the early years. Your accountant sets this up.
GST. If you are registered for GST, you can generally claim the GST credit on the purchase price, which is real cash back into the business.
Finance interest. If you fund the machine with a chattel mortgage, the interest on the loan is generally deductible, on top of the depreciation.
| Asset under $20,000 | Machine over $20,000 | |
|---|---|---|
| Tax treatment | Instant write-off (full cost now) | Depreciated over time |
| Claim GST credit | Yes, if registered | Yes, if registered |
| Deduct finance interest | Yes | Yes |
| Must be installed ready by | 30 June | 30 June (to start claiming this year) |
General information only. Your accountant confirms what applies to your operation.
The timing rule that catches people out
To claim in this financial year, the asset must be installed and ready for use by 30 June, not just ordered or paid for. A machine sitting on back order at a dealership does not count.
With big gear, lead times are real. If you want it working and claimable this year, the finance and the delivery need to be locked away with time to spare. Leaving it to the last week of June is how growers miss out.
Where finance fits, and why it suits a farm
A chattel mortgage is the usual structure. You own the machine from day one, you finance the full amount so your cash stays in the business, and you generally claim depreciation, the GST and the interest.
The part that matters most on the land: repayments can be structured around your cash flow, not a bank's monthly calendar. Seasonal or annual repayments timed to when the crop comes off are common, because that is when the money is there. A lot of growers are asset-rich and cash-flow seasonal, and low-doc options exist that lean on the asset and your business conduct rather than a pile of financials.
Before you sign anything
This is general information, not tax or financial advice, and the rules change. Talk to your accountant about what you can actually claim, and talk to me early about structuring the finance and getting the machine delivered and operational before 30 June. The earlier we start, the more room there is to do it properly.
Sorting machinery finance before EOFY?
Have a quick, no-obligation chat about structuring the finance and getting the gear operational in time. I grew up on the land out here and I understand how a season pays.
Book a free chatMatty Teague, Mortgage and Finance Broker, Powered by Flint. Credit Representative 573962. Flint Group Pty Ltd ACL 488313.
FAQs
What is the instant asset write-off for 2025-26?+
Small businesses with an aggregated turnover under $10 million can immediately deduct the full cost of eligible depreciating assets that cost less than $20,000 each, rather than depreciating them over years. The $20,000 limit applies per asset, so you can write off several. The asset must be first used or installed ready for use between 1 July 2025 and 30 June 2026.
Can I instantly write off a new tractor or header?+
Usually no, because the $20,000 cap is per asset and most tractors and headers cost far more than that. Machinery over $20,000 is not instantly written off. Instead it is depreciated, often through the small business simplified depreciation pool, while the GST and the finance interest are generally claimable too. The write-off mainly helps with smaller gear: tools, smaller implements, some equipment under $20,000.
What is the 30 June timing trap?+
The asset has to be installed and ready for use by 30 June, not just ordered or paid for. If your machine is on back order or not delivered and operational by that date, you cannot claim it in this financial year. With big machinery, that lead time matters, so it pays to sort finance and delivery early.
Does financing the equipment change what I can claim?+
With a chattel mortgage you own the asset from day one, so you can generally claim depreciation (or the instant write-off if it is under $20,000), claim the GST on the purchase price if you are registered, and deduct the interest on the loan. You finance the full amount and the asset is yours. This is general information, not tax advice, so confirm the detail with your accountant.
Is the instant asset write-off changing?+
In the May 2026 Federal Budget the Government announced it will permanently set the small business instant asset write-off at $20,000 from 1 July 2026. For the current year, the $20,000 threshold and the 30 June 2026 install-ready deadline apply.
Can I claim it on used equipment?+
Yes. Both new and second-hand assets can qualify for the instant asset write-off, provided they cost under $20,000, are used for a taxable purpose, and meet the timing and eligibility rules. Some exclusions apply, so check with your accountant.
Matty helps growers and rural businesses finance tractors, headers, machinery, utes and trucks, with repayments structured around the season. He gets farm cashflow because he grew up in it.
Farm & Equipment Finance