Picture this: you've been eyeing that professional-grade camera rig, the laptop that can handle your 4K video editing without sounding like it's about to take flight, or perhaps the recording equipment that'll finally let you capture that crystal-clear sound you've been chasing. You've done the maths, checked your bank balance, and the timing seems perfect. But here's the plot twist that could change everything – the Instant Asset Write-Off (IAWO) scheme that's been your financial backing vocalist is about to leave the stage.
Right now, Australian small businesses can claim an immediate tax deduction for assets costing up to $20,000. That's a pretty sweet deal that lets you turn your artistic passion into tax-efficient business decisions. But come 1 July 2026, unless the government decides to extend this scheme (again), that threshold drops to a measly $1,000. That's not a typo – we're talking about a 95% reduction in the immediate deductible amount. For creative professionals who rely on constantly upgrading their gear to stay competitive, this change could be the difference between hitting the right notes on your tax return and facing a financial flat note.
Let's cut through the noise and get to the main riff. As of December 2025, the Instant Asset Write-Off is locked in at $20,000 per asset for eligible small businesses. This isn't just a promise or a maybe – it's actual legislation that passed through Parliament in November 2025 and received Royal Assent. The Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Act 2025 makes it official law.
This threshold applies to businesses with an aggregated turnover of less than $10 million, which means approximately 4.1 million small businesses across Australia can access this benefit. For creative professionals running their own shows – whether you're a freelance photographer, graphic designer, musician, or video producer – chances are you fall squarely into this category.
Here's where it gets interesting: the $20,000 threshold applies per asset, not as an annual cap. That means if you're planning a serious equipment upgrade, you can purchase multiple assets throughout the 2025-26 financial year, provided each individual item costs less than $20,000. Think of it as building your perfect setlist – you can have multiple songs, as long as each one hits the right note.
The critical deadline? 30 June 2026. That's not just when you need to buy the asset – it needs to be first used or installed ready for use by that date. Sitting in a box doesn't count; it needs to be commissioned and ready to create your next masterpiece.
To access the IAWO, your business needs to tick these boxes:
For creative professionals, this covers the gear that matters: cameras, computers, editing software, audio equipment, drawing tablets, studio lighting, and even the van you use to haul your equipment to gigs or shoots. The catch? If you're using equipment for both business and personal purposes, only the business-use percentage can be claimed under IAWO.
Here's where the record scratches. Unless Parliament passes new legislation to extend the scheme, the IAWO threshold will revert to just $1,000 on 1 July 2026. To put that in perspective, that's barely enough to cover a decent smartphone, let alone the professional-grade equipment most creative businesses depend on.
This reversion isn't speculation – it's the baseline written into the legislation. The $20,000 threshold was always designed as a temporary measure, and we've reached the end of the current extension. Without government intervention, we're heading back to the pre-COVID baseline that last applied in 2023.
When the threshold drops to $1,000, assets costing between $1,000 and $20,000 won't qualify for immediate write-off. Instead, they'll be placed into your small business depreciation pool, where you can claim:
Let's break down what this looks like in real numbers. Say you purchase a $15,000 camera setup after the scheme reverts:
Year 1: $2,250 deduction (15% of $15,000)
Year 2: $3,825 deduction (30% of $12,750 remaining)
Year 3: $2,677.50 deduction (30% of $8,925 remaining)
Year 4: $1,874.25 deduction (continuing until fully depreciated)
Compare that to claiming the full $15,000 immediately under the current IAWO. The difference isn't just about total tax saved – it's about cash flow. When you're running a creative business with tight margins, having that tax relief spread over five to six years instead of one financial year can be the difference between reinvesting in your business growth or struggling to maintain working capital.
The IAWO threshold has been on more of a rollercoaster than most Australian music charts. Here's how it's changed:
| Period | Threshold | Context |
|---|---|---|
| 1 July 2016 - 28 January 2019 | $20,000 | Standard threshold |
| 29 January 2019 - 2 April 2019 | $25,000 | Short-lived increase |
| 2 April 2019 - 11 March 2020 | $30,000 | Pre-pandemic boost |
| 12 March 2020 - 30 June 2021 | $150,000 | COVID-19 emergency support |
| 1 July 2023 - 30 June 2026 | $20,000 | Current extension |
| 1 July 2026 onwards | $1,000 | Baseline reversion (unless extended) |
This constant shifting creates what industry bodies like the Commercial and Asset Finance Brokers Association and the Council of Small Business Organisations Australia call "planning uncertainty." It's hard to map out your business strategy when the tax rules keep changing key signatures every few years.
Now we're getting to the million-dollar question – or more accurately, the $1.9 billion question. The Coalition opposition has made an election commitment to not only extend the IAWO but increase it to $30,000 and make it permanent. That's music to the ears of the estimated 4.1 million eligible small businesses.
According to Parliamentary Budget Office costing, making this $30,000 threshold permanent would decrease the fiscal balance by approximately $1.9 billion over the 2025-26 Budget forward estimates period (through to 2028-29). Break that down year by year:
Those numbers represent the government's foregone tax revenue – essentially the cost of keeping businesses equipped and competitive. Whether that's viewed as an investment in economic growth or an unsustainable fiscal burden depends largely on which side of politics you're standing.
Multiple industry associations aren't just asking for extension – they're calling for the IAWO to be increased to $150,000 and made permanent. Their argument hits several key notes:
Certainty for planning: When businesses know the rules won't change every financial year, they can make long-term investment decisions without constantly watching Parliament for the next legislative update.
Economic stimulus: The IAWO encourages capital investment in productive assets. When businesses invest in better equipment, they're often investing in their capacity to deliver better services, take on larger projects, and grow their operations.
Compliance reduction: Tracking depreciation across multiple years for dozens of assets creates administrative burden. Immediate write-offs simplify your bookkeeping and let you focus on your creative work instead of spreadsheets.
Cash flow support: For creative professionals, having immediate tax relief means you can reinvest that working capital into marketing, skill development, or taking on that passion project that might become your breakthrough work.
Research from OnDeck Australia in March 2025 found that one-third of small business owners surveyed wanted to see the IAWO expanded. That's not surprising when you consider how equipment-dependent creative industries are.
Here's where the rubber meets the road – or where the pick hits the strings, if we're keeping with theme. You've got a 12-month window from now until 30 June 2026 where the $20,000 threshold is guaranteed. How you use that window could significantly impact your business's tax position and cash flow.
If you've been putting off major equipment purchases, the period between now and 30 June 2026 represents your last guaranteed opportunity to access immediate write-offs for assets up to $20,000. This doesn't mean rushing into purchases you don't need – that's never smart business. But if you've been planning upgrades anyway, timing matters.
Consider the "stacking strategy": purchasing multiple eligible assets in the final months of the financial year. Each asset must individually cost less than $20,000, but there's no limit on how many separate assets you can claim. A photographer, for instance, might purchase:
That's $35,000 in equipment purchases, all eligible for immediate write-off because each individual asset falls under the $20,000 threshold. The alternative? After 1 July 2026 (assuming no extension), those same purchases would generate approximately $5,250 in first-year deductions instead of $35,000.
One common misconception trips up even experienced business owners: the installation or first use date matters more than the purchase date. If you order equipment in June 2026 but it doesn't arrive and get commissioned until July, you've missed the window. The ATO is clear on this – the asset must be first used or installed ready for use by 30 June 2026.
For creative professionals, this means:
Simply having an invoice dated before 30 June isn't enough. Documentation of actual use becomes important for your records.
Many creative professionals use equipment for both business and personal purposes. A laptop might handle your client projects during the day and Netflix at night. A car might transport equipment to shoots but also ferry you to the supermarket on weekends.
For mixed-use assets, only the business-use percentage can be claimed under IAWO. However, the entire asset cost must still be under $20,000 for the write-off to apply.
Here's an example: You purchase a $18,000 vehicle and determine it's used 70% for business purposes. You can claim an immediate deduction of $12,600 (70% of $18,000), but the full purchase price of $18,000 needed to be under the threshold for IAWO to apply in the first place.
Keeping detailed records of business versus personal use – through logbooks, usage logs, or time-tracking – protects your claim if the ATO comes knocking.
Not all business expenses are created equal in the eyes of the Tax Office. Understanding what qualifies for IAWO versus what doesn't can save you from nasty surprises at tax time.
For creative professionals, the IAWO typically covers:
Technology and Computing: Computers, laptops, tablets, monitors, drawing tablets, processors, and IT equipment form the backbone of most creative work. Software also qualifies if it's purchased as a perpetual licence with a useful life under one year (ongoing subscriptions are expensed differently).
Photography and Video: Cameras, lenses, drones, gimbals, tripods, lighting equipment, backdrops, and studio gear all qualify. This is particularly relevant for photographers and videographers who need to constantly upgrade to keep pace with client expectations and industry standards.
Audio Equipment: Microphones, audio interfaces, mixing desks, studio monitors, recording equipment, and instruments used in your business (yes, that guitar can be a legitimate business asset if you're a professional musician).
Office Setup: Desks, chairs, filing cabinets, printers, and other office furniture and equipment qualify, particularly important if you're setting up or upgrading a home studio.
Vehicles: Vans, trucks, utes, and cars used for business purposes can be claimed, though passenger vehicles are subject to the car limit of $69,674 for the 2024-25 and 2025-26 financial years. This limit applies even if you use the IAWO – you can't claim more than the car limit allows.
Certain assets are explicitly excluded from simplified depreciation rules, making them ineligible for IAWO:
The capital works exclusion is particularly important for creative professionals. If you're renovating a home studio or building a photography space, those structural improvements follow different depreciation rules spread over 40 years. Only the moveable equipment inside that space qualifies for IAWO.
The ATO requires you to maintain records for five years after the income year to which they relate. For IAWO claims, this means keeping:
Think of this as your encore performance insurance – if the ATO asks you to justify your claims years later, you'll have the evidence ready to go.
The next 18 months represent a critical period for equipment-dependent businesses, particularly creative professionals who rely on technology and specialised gear. The current $20,000 IAWO threshold offers immediate tax relief that can significantly improve cash flow and support business growth. But with the scheme set to revert to just $1,000 on 1 July 2026, the window for maximising this benefit is closing.
Whether the threshold gets extended, increased, or reverts to baseline will ultimately depend on legislative action that may not be clear until mid-2026 – potentially leaving businesses in limbo about their investment planning. For creative professionals who've been considering equipment upgrades, the safest bet is treating the 30 June 2026 deadline as real and planning accordingly.
The difference between claiming $20,000 immediately versus spreading it over five to six years isn't just about total tax saved – it's about having working capital available when you need it to take advantage of opportunities, invest in marketing, or simply keep the lights on during quieter periods. In creative industries where cash flow can be unpredictable, that timing matters enormously.
Smart businesses are already mapping out their equipment needs through to mid-2026, prioritising essential upgrades while the immediate write-off remains available. Whether you're a photographer eyeing new camera gear, a designer needing a laptop that can handle complex rendering, or a musician upgrading your recording setup, the time to act is now – while the tax benefits are still hitting all the right notes.
Ready to crank your finances up to 11? Let's chat about how we can amplify your profits and simplify your paperwork – contact us today.
Yes, the IAWO applies to both new and second-hand assets, provided they meet all other eligibility requirements. The asset must cost less than $20,000, be first used or installed ready for use between 1 July 2025 and 30 June 2026, and be used in your business with aggregated turnover under $10 million. This makes second-hand equipment purchases an excellent option for creative professionals on tighter budgets who still want to access immediate tax benefits.
The IAWO requires the asset to be first used or installed ready for use by 30 June 2026 – not just purchased by that date. If you buy equipment in June but don't commission it for business use until July, you've missed the window for the $20,000 threshold and will need to apply whatever rules are in place after 1 July 2026 (likely the $1,000 threshold unless extended). It's important to ensure that major purchases can realistically be put into operation before 30 June.
Yes, with a $1,000 threshold, assets costing less than $1,000 can still be immediately written off. Items such as software licenses, smaller accessories, basic office supplies, and minor equipment purchases would qualify for an immediate deduction. However, any asset costing between $1,000 and $20,000 would have to be depreciated over subsequent years.
The threshold is GST-exclusive for businesses registered for GST. This means you determine eligibility based on the price before GST is added. For instance, a GST-inclusive price of $22,000 actually represents $20,000 plus $2,000 GST. If you aren’t registered for GST, then the GST-inclusive amount is used to assess eligibility.
No, you cannot artificially split a single asset into separate components to manipulate the threshold. The ATO assesses what constitutes a 'unit of property' – meaning items that work together as a single functional asset. However, genuinely separate assets purchased independently can each be claimed individually under the IAWO, as long as each asset qualifies on its own.
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