A popular tax break is set to become a permanent fixture, allowing small businesses and tradies to continue claiming tax deductions on equipment worth up to $20,000.Treasurer Jim Chalmers will make the instant asset tax write-off a permanent fixture for small businesses, as well as a shift to “dynamic monthly tax instalments” one week out from the May budget.The tax break was set to run until June 30 before the threshold would plummet from $20,000 back to $1000, however, under the new plan, the scheme is set to remain in place, providing major relief to small businesses and tradies alike.
Treasurer Dr Jim Chalmers during a press conference at Parliament House in Canberra on Tuesday 5 May 2026. fedpol Photo: Alex Ellinghausen (Alex Ellinghausen)
The $20,000 threshold will apply per asset and will expand across tools, technology and other equipment, both new and second-hand, and can be claimed in full at the end of every financial year.
Treasurer Jim Chalmers said that a productivity push is “one of the most important parts” of Tuesday’s budget.
“We’ll save small businesses thousands of dollars by making the instant asset permanent in the Budget on Tuesday,” he said.
“This means small businesses will be able to immediately deduct every piece of new equipment worth up to $20,000, from new tech to tools to machinery.
“This will help save small businesses 376,000 hours a year in compliance, cutting red tape and getting costs down in our economy.”
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