Why EOFY Matters for Asset Finance
The Australian financial year runs from July 1 to June 30. Any tax deductions — depreciation, instant asset write-off, interest — must relate to assets that are installed ready for use or first used for a taxable purpose by June 30 to be claimed in that financial year.
Timing can affect when eligible depreciation, interest and GST credits are recognised, but settlement before 30 June does not by itself guarantee a deduction. Before ordering a truck, excavator, ute or equipment item:
- Confirm that the asset solves a revenue, capacity, safety or replacement problem
- Ask an accountant which current-law treatment applies to the entity and use date
- Keep supplier, delivery, installation and business-use evidence
- Compare total cash cost, residual exposure and downside utilisation — not only the proposed deduction
Instant Asset Write-Off: Check the 2026–27 Law First
The enacted $20,000 extension ended on 30 June 2026. A proposal to make a less-than-$20,000 setting permanent was still before Parliament when this page was checked on 9 August 2026. A proposal is not an entitlement.
Checks Before Modelling a Deduction
- Law: Confirm the bill has received Royal Assent and identify the application dates
- Entity: Check turnover, simplified-depreciation election and excluded-asset rules
- Cost: The wording is generally “less than” a threshold, not “up to” it
- Use date: Confirm when the asset was first used or installed ready for taxable use
- Apportionment: Exclude or apportion private and non-creditable use
Plan the Transaction Before the Deadline
Prepare the supplier quote, delivery evidence, financials and structure comparison early. Finance timing depends on lender, asset, seller and document checks.
Start an Enquiry →Depreciation Strategies for EOFY
If an immediate write-off is unavailable, ordinary or simplified depreciation may still apply. The correct method depends on the entity, election, asset and current law.
General Small Business Pool
An eligible small business using simplified depreciation may add qualifying assets to a general pool. Confirm the current rates, taxable-purpose percentage and pool treatment with the accountant before putting a benefit in the acquisition case.
Diminishing Value Method
Under ordinary depreciation, timing and effective life affect the first-year amount. A late purchase can produce only a small current-year deduction, so compare the operational value of buying now with the full cash and financing cost.
Which Structure Allows Depreciation?
| Structure | Depreciation? | Why |
|---|---|---|
| Chattel Mortgage / CGL | May be claimable by the business | Business owns while lender takes security |
| Hire Purchase | May be claimable by the hirer | Tax treatment must be confirmed |
| Finance Lease | Lessor generally claims tax depreciation | Lessee payment and AASB 16 treatment is separate |
| Operating Lease | Lessor generally claims tax depreciation | Lessee payment and AASB 16 treatment is separate |
EOFY Asset Finance Checklist
Use this transaction sequence; it does not guarantee approval or a tax outcome:
| When | Action |
|---|---|
| Business case | Identify the job, capacity gap, utilisation and downside case. Obtain comparable supplier quotes. |
| Evidence | Prepare financials, bank statements, asset details, seller identity and business-use records. |
| Finance comparison | Compare term, deposit, residual, fees, early-exit cost and total repayment — not only the headline rate. |
| Before June 30 | Ensure the asset is delivered, installed, and ready for use. Take photos with dates as evidence. |
| After June 30 | Give the accountant the contract, tax invoice, proof of payment/use and logbook or apportionment evidence. |
Common EOFY Mistakes to Avoid
- Buying assets you don't need: Tax deductions only save you a percentage of the cost (your marginal tax rate). Don't spend $100,000 just to save $25,000 in tax — you're still out of pocket $75,000.
- Missing the "installed ready for use" rule: Settlement alone isn't enough. The ATO requires the asset to be delivered and operational by June 30. If it arrives in July, the deduction shifts to the next financial year.
- Assuming accounting equals tax ownership: AASB 16 presentation and tax depreciation are different questions. Have the contract classified for both purposes.
- Forgetting the business-use percentage: For mixed-use assets (especially vehicles), only the business portion is deductible. Keep a logbook.
- Leaving it too late: Finance applications in the last week of June can be rushed and may result in less favourable terms. Start early.
Worked Decision Example: $150,000 Excavator
A construction business is considering a $150,000 ex-GST excavator. That cost is far above a proposed less-than-$20,000 write-off threshold, so the acquisition case must not assume an immediate $150,000 deduction.
| Input to Verify | Buyer Data | Decision Use |
|---|---|---|
| Utilisation and billing | Expected billable hours, rate and downtime | Tests whether operating margin covers repayments |
| Asset and delivery | Serial number, configuration, supplier and ready-for-use date | Supports valuation, lender and tax evidence |
| Finance structure | Deposit, term, residual, fees and total repayment | Exposes the end obligation and cash-flow downside |
| Tax and GST | To be calculated by the accountant under current law | Prevents a proposed or ineligible deduction entering the business case |
No tax saving is shown because the entity, business use, use date and depreciation method are not known.
Test the Finance Assumptions
Enter the asset price, term and residual to test repayment sensitivity. Treat tax outputs as scenarios for adviser confirmation.
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