By John Pierre Saliba · April 2026 · OverdraftMe
The $20,000 instant asset write-off has been extended to 30 June 2026 for businesses with turnover under $10 million. That means you can buy a business asset under $20,000, install it, and claim the full cost as a deduction in the year of purchase - no depreciation over multiple years.
Here's what most people miss: if you fund that purchase with a business overdraft, the interest on the overdraft is ALSO tax deductible. Two deductions from one purchase.
Buy a $19,999 asset before 30 June 2026. Claim the $19,999 as an instant deduction. Pay the overdraft interest as a separate deduction. At the 25% base rate entity tax rate, you save ~$5,000 in tax on the asset alone - plus the ongoing interest deduction.
Without an overdraft, buying a $20K asset means $20K leaving your bank account immediately. That's a cash flow hit. With an overdraft, the $20K stays available as working capital while you repay gradually. You get the tax deduction NOW and spread the cash outflow over months.
An electrical contractor buys a $18,000 van fitout in June 2026, funded from their business overdraft at 18% p.a.
| Item | Amount | Tax deductible? |
|---|---|---|
| Van fitout (instant asset write-off) | $18,000 | YES - full deduction in 2025-26 |
| Overdraft interest (repaid over 6 months) | ~$970 | YES - deductible as incurred |
| Overdraft line fee (6 months) | ~$135 | YES - deductible |
| Total deductions | $19,105 | Tax saving at 25%: ~$4,776 |
The asset must be installed and ready for use by 30 June 2026. If you're planning a purchase, get your overdraft sorted now so the funds are available when you need them. Don't wait until June - approval takes hours but you don't want to be scrambling at EOFY.
Talk to your accountant about your specific situation. This is general information, not tax advice. The instant asset write-off rules and overdraft deductibility depend on your individual circumstances.
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