Quick answer
Before buying equipment for tax reasons at EOFY, check three things: that the asset genuinely earns its keep in the business, whether you're eligible for the $20,000 instant asset write-off for small businesses, and that the asset will be first used or installed ready for use before 30 June. Financing can preserve cash while you still claim eligible deductions, but the tax benefit should never be the only reason to buy.
Key points
- Buy equipment because the business needs it, not just for the deduction.
- Eligible small businesses can use the $20,000 instant asset write-off.
- Timing depends on when an asset is first used or installed ready for use.
- Financing can preserve cash while keeping eligible deductions.
- Ask your accountant before you buy — rules depend on your situation.
Why EOFY creates an equipment rush
Every year, as 30 June approaches, advertising fills with “beat the end of financial year” offers. Dealers push stock, accountants field questions about write-offs, and business owners wonder whether they should buy that ute, oven or excavator now rather than later.
There can be good reasons to time a purchase around the financial year. But the rush also leads to rushed decisions: buying gear the business doesn’t really need, buying too much, or paying cash and leaving the business short in July. This guide helps you think it through calmly. It’s general information; your accountant should confirm how the rules apply to you.
Rule one: the business must need it
A tax deduction reduces your tax by a portion of the asset’s cost, not the whole cost. If you spend money on something you wouldn’t otherwise buy, you’re still out of pocket for most of it. The right question is: would I buy this asset anyway in the next few months? If the answer is yes, timing it to suit the financial year may make sense. If the answer is no, the deduction alone isn’t a reason.
How the instant asset write-off works
The instant asset write-off lets eligible small businesses deduct the business portion of an asset’s cost in the year it’s first used or installed ready for use, instead of spreading the deduction over several years of depreciation. The ATO’s pages, linked below, describe the $20,000 threshold for eligible small businesses and the detailed rules.
Key points to check with your accountant:
| Question | Why it matters |
|---|---|
| Is my business eligible? | Eligibility depends on aggregated turnover and other rules |
| Is the asset under the threshold? | The threshold applies per asset, and GST treatment affects the figure |
| When is it first used or installed ready for use? | That date, not the order date, generally decides the income year |
| What’s the business-use portion? | Only the business portion is deductible |
| Am I using simplified depreciation? | Small businesses using the simpler depreciation rules have pooling options for assets above the threshold |
Assets above the threshold aren’t excluded from deductions; they’re generally depreciated over time, often through the small business pool.
Timing: “installed ready for use” is what counts
This catches people every year. Paying a deposit on 28 June for a machine that arrives in August generally doesn’t bring the deduction into the current year. The asset usually needs to be first used or installed ready for use by 30 June. If you’re cutting it fine, confirm delivery and installation dates in writing with the supplier, and check with your accountant.
Cash or finance?
Paying cash for equipment at EOFY can leave the business short exactly when the new financial year’s bills arrive: insurance renewals, registrations, the June BAS and, since 1 July 2026, super with every payday under Payday Super.
Equipment finance spreads the cost over the asset’s working life, keeping cash in the business. With a chattel mortgage, you own the asset from day one, which is relevant for depreciation and write-off purposes. Leasing is treated differently. Your accountant can tell you which structure suits your tax position.
If you’re weighing up a purchase now, send us the quote and we can talk through how financing it would work.
A sensible EOFY equipment checklist
- Confirm the need. Would you buy this anyway in the next six months?
- Get a written quote with delivery and installation dates.
- Ask your accountant about eligibility, thresholds and timing.
- Decide cash or finance based on your July cash flow, not just June’s tax bill.
- Choose the structure (chattel mortgage, hire purchase or lease) with your accountant’s input.
- Arrange finance early. Approval and settlement take time, and EOFY is busy for lenders and dealers.
- Make sure it’s installed and ready before 30 June if timing matters.
- Keep the paperwork: tax invoice, delivery note and installation confirmation.
Used equipment and private sales
Used equipment can qualify too, subject to the rules. If buying privately or at auction, run a PPSR search to make sure there’s no existing finance over the asset, inspect it carefully and get a tax invoice or bill of sale. Lenders finance used equipment regularly, though age limits can apply. See machinery finance and vehicle finance for specifics.
An illustrative example
A café owner has been planning to replace an ageing coffee grinder and add a second espresso machine. Both are needed regardless, and both are under the threshold individually. After checking with the accountant, the owner finances the machines through a chattel mortgage in May, has them installed in early June, and keeps cash in the business for the July insurance renewal. (Illustrative only.)
What not to do
- Don’t buy something you don’t need because of a deduction.
- Don’t pay cash if it leaves the business short in July.
- Don’t assume ordering equals installation.
- Don’t guess the rules; ask your accountant.
Comparing the true cost: cash versus finance
A useful exercise is to compare two versions of July: one where you paid cash in June, and one where you financed the purchase.
| Paid cash in June | Financed in June | |
|---|---|---|
| Cash at 1 July | Lower by the full price | Lower by the deposit, if any |
| June tax position | Same deduction, if eligible | Same deduction, if eligible |
| July bills | Paid from a thinner balance | Paid from a healthier balance |
| Ongoing | No repayments | Regular repayments plus finance costs |
Neither column is automatically better. If the business has plenty of cash and nothing better to do with it, paying cash avoids finance costs. If cash is needed for stock, wages or a buffer, financing protects the business through the new financial year. The deciding factor is usually what that cash would otherwise be doing.
Don’t forget the new financial year’s obligations
July brings a cluster of costs that are easy to underestimate when you’re focused on June: the June quarter BAS, annual insurance renewals, vehicle registrations, software subscriptions, and wage increases that often take effect from the first full pay period in July. Add those to your forecast before deciding how to pay for equipment. A purchase that looks comfortable on 25 June can feel very different on 25 July.
A simple safeguard is to list every July and August commitment on one page before you sign a purchase order, then check the business could cover them even if a large customer paid late.
Equipment that earns its keep, on your terms
If your business genuinely needs equipment, financing it can protect your cash while you invest in growth. Enquiring takes about a minute, there’s no credit check at that stage, and one specialist works on your request rather than it being farmed out to every lender.
Please tell us what you’re buying, the price, the supplier and when you need it installed. Accurate details help us meet your timing. Start your enquiry.
Frequently asked questions
What is the instant asset write-off?
It lets eligible small businesses claim an immediate deduction for the business portion of an asset's cost, rather than depreciating it over several years. The threshold is $20,000 per asset for eligible businesses.
Can I use the write-off if I finance the equipment?
Generally the deduction depends on owning the asset and when it's first used or installed ready for use, not on how you paid. Structure matters, so check with your accountant.
Does buying on 29 June guarantee the deduction this year?
No. The asset generally needs to be first used or installed ready for use by 30 June, not just ordered or paid for.
Is it worth buying something just for the tax deduction?
Rarely. A deduction reduces tax by a fraction of the cost. You still spend the full amount, so the asset needs to be genuinely useful.