Independent retailers considering new equipment, technology or store upgrades may be able to benefit from the $20,000 Instant Asset Write-Off, which has now been made permanent for eligible small businesses.
The Australian Government announced the measure as part of the 2026–27 Federal Budget, and it is now law from 1 July 2026.
The permanent measure allows eligible small businesses with an aggregated annual turnover of less than $10 million to immediately deduct the business-use portion of eligible assets costing less than $20,000.
Importantly, the $20,000 threshold applies to each eligible asset, not to the business as a whole. This means an eligible business may be able to immediately deduct multiple qualifying assets, provided each individual asset costs less than $20,000 and meets the relevant requirements. This is also the key point highlighted in information provided to retailers by Metcash.
What could this mean for independent retailers?
For retailers planning investment in their stores, the permanent write-off may provide an opportunity to bring forward expenditure on equipment and technology while supporting cash flow.
Potential store investments may include:
- electronic shelf labels, gateways and related infrastructure;
- point-of-sale and scanner upgrades;
- computers, tablets and back-office technology;
- refrigeration and energy-efficiency equipment; and
- security and other operational equipment.
These examples are not automatically eligible simply because they fall into these categories. The particular asset, its cost, how it is used in the business and other eligibility requirements will determine whether the deduction is available.
How does the write-off work?
To qualify for the immediate deduction, an eligible asset must cost less than $20,000.
The asset must also be first used or installed ready for use in the relevant income year.
Both new and second-hand assets may potentially qualify, subject to the normal exclusions and limits applying to the instant asset write-off.
Where an asset costs $20,000 or more, it will generally not qualify for the immediate write-off and will instead be dealt with under the small business depreciation rules.
Do businesses need to apply?
There is generally no separate application process. The deduction is claimed through the normal tax process.
Members should speak with their accountant or tax adviser before making purchasing decisions to confirm whether an asset qualifies, how the timing rules apply and the appropriate tax treatment for their individual business.
Considering a store upgrade?
With the $20,000 Instant Asset Write-Off now a permanent feature of the small business tax system, members may wish to review upcoming expenditure on equipment, technology, energy efficiency or security.
If you are planning investment in your business, speak with your accountant or tax adviser about whether the purchase may qualify for the instant asset write-off.
This information is general in nature and does not constitute tax, legal or financial advice. Eligibility depends on individual business circumstances. Members should seek independent advice from their accountant or tax adviser before making investment or tax decisions.
