The instant asset write-off for trucks allows eligible Australian small businesses to claim an immediate deduction for the business-use portion of an eligible vehicle where the asset costs less than the applicable threshold.

For 2026, the key threshold is $20,000 per asset. The $20,000 threshold applied through to 30 June 2026 and, from 1 July 2026, has now been made permanent for eligible small businesses with aggregated annual turnover of less than $10 million. The asset must cost less than $20,000, not $20,000 or less.

That distinction matters for truck buyers because most commercial trucks cost considerably more than $20,000. A $120,000 rigid truck or $250,000 prime mover does not become immediately deductible simply because it is purchased for business or financed. Where the truck exceeds the threshold, different depreciation rules generally apply.

The Asset Finance Shop (TAFS) primarily arranges chattel mortgage finance for commercial trucks, allowing the business to own the truck from settlement while spreading the purchase cost over an agreed finance term. TAFS can finance new and used trucks through dealerships, private sellers and auctions through access to more than 80 bank and non-bank lenders.

This guide explains when the instant asset write-off for trucks applies in 2026, what happens when a truck costs more than $20,000, how GST and depreciation affect the overall tax position and how truck finance can fit into the purchase.

What Is the Instant Asset Write-Off for Trucks?

The instant asset write-off is a tax deduction available under the simplified depreciation rules for eligible small businesses purchasing qualifying depreciating assets.

Instead of depreciating an eligible asset over several years, the business may be able to claim the business-use portion of its cost as a deduction in the income year in which the asset is first used or installed ready for use.

For eligible small businesses, the threshold is currently:

Assets costing less than $20,000 per asset

The threshold applies separately to each asset, which means an eligible business can potentially use the write-off for multiple qualifying purchases.

The deduction reduces taxable income.

It does not mean the government refunds the entire cost of the truck.

What Are the Instant Asset Write-Off Rules for 2026?

There are two periods to understand because the 2026 calendar year crosses two Australian income years.

1 January 2026 to 30 June 2026

For the end of the 2025-26 income year, eligible small businesses could use the $20,000 instant asset write-off for eligible assets first used or installed ready for use by 30 June 2026.

The business generally needed:

• Aggregated annual turnover of less than $10 million
• To be using the simplified depreciation rules
• An eligible depreciating asset
• The asset to cost less than $20,000
• The asset to be used or installed ready for business use within the relevant period

The $20,000 temporary threshold was legislated through 30 June 2026.

From 1 July 2026

The $20,000 threshold has now been made permanent.

From the 2026-27 income year onwards, eligible small businesses with aggregated turnover of less than $10 million can immediately deduct eligible assets costing less than $20,000 under the simplified depreciation rules. The legislation received assent on 26 August 2026.

This gives small businesses more certainty than the previous year-by-year extensions.

Can I Instantly Write Off a Truck in 2026?

Potentially, but only if the truck meets the relevant requirements.

Most importantly, the truck must cost less than $20,000.

That means a used commercial truck purchased for $18,000 may potentially qualify where all other eligibility requirements are satisfied.

A truck costing:

• $30,000
• $80,000
• $150,000
• $300,000

would not qualify for the $20,000 instant asset write-off simply because it is used entirely for business.

The threshold is tested against the cost of the asset itself.

The ATO specifically notes that reducing an asset's cost by its business-use percentage does not bring a higher-cost vehicle under the instant asset write-off threshold.

Does the Instant Asset Write-Off Apply to Used Trucks?

Yes, eligible second-hand assets can qualify.

The instant asset write-off is not restricted to brand-new equipment.

An eligible business may potentially claim the deduction on a used truck where:

• The truck costs less than $20,000
• The business satisfies the turnover and simplified depreciation requirements
• The truck is an eligible depreciating asset
• It is first used or installed ready for business use during the relevant income year

The ATO confirms that both new and second-hand assets can qualify for the instant asset write-off.

This could make the rules relevant to some older:

• Rigid trucks
• Light commercial trucks
• Tippers
• Vans
• Utes
• Trailers
• Other transport assets

The purchase price and eligibility still need to be confirmed.

Does a $20,000 Truck Qualify?

No.

The current threshold applies to eligible assets costing less than $20,000.

An asset costing exactly $20,000 does not fall below the threshold.

An eligible asset costing $19,999 may potentially qualify.

This is worth confirming with your accountant before completing a purchase based on the expected deduction.

What Happens if My Truck Costs More Than $20,000?

This will be the position for most commercial truck purchases.

Where an eligible small business uses the simplified depreciation rules and purchases an asset costing $20,000 or more, the asset will generally be added to the small business depreciation pool instead of being immediately written off.

Under the simplified depreciation rules, assets added to the pool are generally depreciated at:

• 15% in the first income year
• 30% in subsequent income years

The first-year rate applies regardless of when during the income year the asset is acquired.

This means a truck costing $200,000 may still generate significant depreciation deductions, but it is not a $200,000 instant write-off.

Example: Buying a $150,000 Truck in 2026

Consider a transport business purchasing a $150,000 truck.

The business:

• Has turnover below $10 million
• Uses the simplified depreciation rules
• Uses the truck entirely for business

Because the truck costs more than $20,000, it does not qualify for the instant asset write-off.

Instead, the eligible business-use cost would generally be dealt with under the small business depreciation pool.

The business may also have:

• GST consequences
• Finance interest
• Operating expenses
• Registration
• Insurance
• Servicing
• Repairs

that need to be considered separately.

Your accountant should calculate the actual tax position.

What Does "Write-Off" Actually Mean?

An instant asset write-off is an income tax deduction.

It does not mean:

• The government pays for the truck
• The truck becomes free
• Your finance balance disappears
• You receive the purchase price back in cash
• Every dollar spent produces a dollar of tax saving

The deduction reduces the taxable income of the eligible business.

The actual tax benefit depends on the business's taxable position and circumstances.

For example, claiming a $15,000 deduction does not mean receiving a $15,000 refund.

This distinction is important when deciding whether to purchase a vehicle.

A tax deduction should support a commercially sensible truck purchase, not be the only reason for making one.

Does GST Count Towards the $20,000 Threshold?

It depends on whether the business is registered for GST and entitled to claim GST credits.

GST-Registered Business

If the business is registered for GST and can claim the full GST credit, the GST component is generally excluded when calculating the cost for depreciation purposes.

This means the instant asset write-off threshold is effectively considered on a GST-exclusive basis in that situation.

Business Not Registered for GST

If the business is not registered for GST, the GST paid is generally included in the asset cost for depreciation purposes.

The threshold is therefore considered inclusive of GST.

Where the business can claim only part of the GST credit, the cost is reduced by the amount of GST that can actually be claimed.

Your accountant should confirm which cost applies before you rely on the threshold.

Can I Claim GST on a Truck Purchase?

A GST-registered business may be able to claim an eligible GST credit on a truck purchased for business use, subject to the normal GST requirements.

The GST position can depend on:

• Whether the business is GST registered
• Whether GST was included in the purchase
• Whether the seller is registered for GST
• Business-use percentage
• Whether the correct tax invoice is available

A truck purchased from a GST-registered dealership may therefore have a different GST position from a truck bought from a private seller.

Private sellers may not charge GST, meaning there may be no GST credit available on the purchase.

This should be checked before comparing the total cost of dealer and private-sale trucks.

Does the Car Depreciation Limit Apply to Trucks?

Not necessarily.

The depreciation car limit applies to vehicles that meet the relevant definition of a car for tax purposes.

The ATO notes that if a vehicle is not considered a passenger vehicle, the passenger car depreciation limit does not apply to that vehicle.

This is relevant for commercial vehicles such as many:

• Heavy trucks
• Prime movers
• Large rigid trucks
• Tippers
• Purpose-built commercial vehicles

Vehicle classification matters, so the treatment of the particular truck should be confirmed with your accountant.

Can I Finance a Truck and Still Claim the Instant Asset Write-Off?

Using finance does not automatically prevent an otherwise eligible truck from qualifying for the instant asset write-off.

The tax question and the finance question are separate.

The tax rules look at matters such as:

• Business eligibility
• Asset cost
• Business use
• When the asset is first used or ready for use
• Applicable depreciation rules

The finance determines how the purchase is funded.

TAFS primarily arranges truck purchases through a chattel mortgage. Under a chattel mortgage, the business owns the truck from settlement while the lender registers security over it until the finance is repaid.

This allows the business to spread the purchase cost over time rather than paying the complete purchase price upfront.

Does the Truck Have to Be Paid Off Before Claiming a Deduction?

The relevant tax treatment is not simply determined by whether the truck has been completely paid for in cash.

A business may finance the truck over several years while the tax treatment of the asset is determined under the applicable depreciation rules.

For example, a business could finance a truck using a five-year chattel mortgage.

The loan may run for five years, while the tax treatment of the truck is dealt with separately.

Speak with your accountant about when and how deductions can be claimed.

Does Finance Interest Affect the Tax Outcome?

Finance interest is separate from the depreciation treatment of the truck.

Where money is borrowed for an income-producing business asset, eligible finance interest may potentially form part of the business's deductible expenses.

The principal repayment is different.

Repaying the amount originally borrowed does not simply make the entire loan repayment a tax deduction.

This means a financed truck may involve several separate tax considerations:

1. GST on the original purchase
2. Depreciation or instant asset write-off where eligible
3. Eligible finance interest
4. Ongoing business operating expenses

Your accountant should confirm the treatment of each amount.

Can I Claim Both GST and the Instant Asset Write-Off?

Potentially, but they are different tax mechanisms.

GST and income tax deductions are calculated separately.

A GST-registered business may potentially claim an eligible GST credit through its Business Activity Statement.

The remaining asset cost is then dealt with under the relevant income tax depreciation rules.

This is why GST registration affects the amount used when testing the instant asset write-off threshold.

Does Business Use Matter?

Yes.

The instant asset write-off applies to the taxable or business-use portion of an eligible asset.

Where a truck is used entirely for business, the business-use percentage may be 100%.

Where there is private use, the deduction generally needs to reflect the business-use portion.

For example, a light commercial vehicle used for both work and personal purposes may require an adjustment.

The ATO confirms that the immediate deduction applies to the business portion of an eligible asset.

Keep records that support the business-use percentage.

When Does the Truck Need to Be Ready for Use?

The relevant date is not always simply when you place the order or pay the deposit.

Eligibility depends on when the asset is first used or installed ready for use for a taxable purpose.

This becomes particularly important around 30 June.

For example, ordering a truck in June but not receiving and having it ready for use until July may place the deduction in the following income year.

If timing is important to the business's tax planning, confirm the position with your accountant before assuming that signing an order before 30 June is enough.

Can a Private-Sale Truck Qualify?

Potentially.

The instant asset write-off can apply to eligible second-hand assets, so a truck does not have to be purchased through a dealership.

However, a private sale can affect:

• GST treatment
• Purchase documentation
• Seller verification
• Finance requirements

TAFS can arrange private-sale truck finance through selected lenders. Additional lender checks may include seller identity, ownership, VIN, registration, existing security, vehicle condition and market value.

Can an Auction Truck Qualify?

Potentially.

Auction purchases can also be financed through selected lenders, and a used truck may qualify for the instant asset write-off where all tax requirements are met and the cost is below the threshold.

Before bidding, consider:

• Hammer price
• Buyer's premium
• GST
• Transport costs
• Registration
• Repairs
• Other costs required to get the truck ready for use

For depreciation purposes, asset cost can include additional amounts spent on transporting and installing the asset ready for use.

Those additional costs may therefore matter when determining whether an asset remains below the $20,000 threshold.

Does a Trade-In Reduce the Truck's Cost for the Write-Off Test?

Do not assume that only the net amount you pay after a trade-in is used for depreciation purposes.

For tax purposes, buying the new truck and disposing of the old truck are generally treated as separate transactions.

The ATO notes that even where a trade-in appears to reduce the amount payable on an invoice, the acquisition of the new asset and disposal of the old asset are dealt with separately for depreciation purposes.

This is another reason not to determine write-off eligibility from the amount financed alone.

Is the Finance Amount the Same as the Tax Cost of the Truck?

Not necessarily.

The amount financed can be affected by:

• Deposit
• Trade-in
• Existing finance payout
• Lender fees
• Balloon
• Other finance costs

The tax cost of the asset is determined separately under the tax rules.

For example:

Truck purchase price: $100,000
Deposit: $20,000
Finance amount: $80,000

The business has not purchased an $80,000 truck.

It has purchased a $100,000 truck and chosen to finance $80,000 of the purchase.

Tax treatment should therefore not be based simply on the loan amount.

What Truck Costs Can Be Tax Deductible?

Apart from depreciation, a commercial truck can create a number of ongoing business expenses.

Depending on the business and vehicle use, these may include:

• Finance interest
• Fuel
• Insurance
• Registration
• Servicing
• Repairs
• Tyres
• Tolls
• Driver costs
• Other operating expenses

These are separate from the instant asset write-off.

The treatment depends on the business and nature of the expenditure.

Speak with your accountant about what can be claimed.

What Should I Ask My Accountant Before Buying a Truck?

Before making a truck purchase partly because of an expected tax deduction, ask:

1. Does my business qualify for the simplified depreciation rules?
2. Is our aggregated turnover below the applicable limit?
3. Does this particular truck qualify for the instant asset write-off?
4. What cost should be used for the $20,000 threshold?
5. Is that figure GST inclusive or GST exclusive for my business?
6. What percentage of the truck will be used for business?
7. Does the passenger car depreciation limit apply?
8. If the truck costs more than $20,000, how will it be depreciated?
9. When does the truck need to be ready for use?
10. Can GST be claimed?
11. How will finance interest be treated?
12. What happens when the truck is eventually sold or traded?

The tax position should be understood before the finance structure is finalised.

How TAFS Can Finance a Truck Purchase

The instant asset write-off determines how an eligible asset may be treated for tax purposes.

TAFS handles the finance side of the purchase.

TAFS primarily arranges chattel mortgage finance for commercial trucks.

The process can include:

1. Reviewing the business and proposed truck purchase
2. Completing a soft credit check
3. Assessing the application through the internal credit team
4. Comparing suitable lenders through access to more than 80 bank and non-bank lenders
5. Structuring the finance amount, deposit, term and balloon
6. Making the formal application to the selected lender
7. Coordinating approval and settlement

TAFS can arrange finance for new and used trucks purchased through dealerships, private sellers and auctions.

Can a Truck Cost More Than $20,000 and Still Be Worth Buying Before Tax Time?

Yes.

The instant asset write-off should not determine whether a commercially necessary truck is worth buying.

A $200,000 prime mover does not qualify for a $200,000 instant asset write-off.

But the truck may still:

• Generate additional revenue
• Replace an unreliable vehicle
• Support a new contract
• Increase freight capacity
• Reduce subcontracting
• Reduce downtime
• Improve business efficiency

The asset can also still have depreciation and other tax consequences.

The decision should begin with whether the truck makes sense for the business.

Tax treatment comes after that.

Frequently Asked Questions

What Is the Instant Asset Write-Off for Trucks in 2026?

Eligible small businesses using the simplified depreciation rules can immediately deduct the business-use portion of eligible depreciating assets costing less than $20,000.

The $20,000 threshold is now permanent from 1 July 2026.

What Is the 2026 Instant Asset Write-Off Limit?

The threshold is $20,000 per eligible asset.

The asset must cost less than $20,000.

Is the $20,000 Instant Asset Write-Off Permanent?

Yes.

Legislation passed in August 2026 permanently increased the relevant small business simplified depreciation threshold to $20,000 from 1 July 2026.

What Turnover Does My Business Need to Have?

The measure applies to eligible small businesses with aggregated annual turnover of less than $10 million.

Can I Write Off a $100,000 Truck Instantly?

Generally not under the $20,000 instant asset write-off.

A $100,000 truck exceeds the threshold.

An eligible business using simplified depreciation would generally deal with the truck under the small business pool instead.

Can I Write Off a $19,000 Used Truck?

Potentially.

New and second-hand assets can qualify where the business and asset satisfy all applicable requirements.

Can I Write Off a Truck That Costs Exactly $20,000?

No.

The threshold applies to eligible assets costing less than $20,000.

What Happens to a Truck That Costs More Than $20,000?

For eligible businesses using simplified depreciation, assets at or above the threshold are generally added to the small business pool.

The pool generally provides a 15% deduction in the first year and 30% in later years.

Can a Financed Truck Qualify for the Instant Asset Write-Off?

Potentially.

Financing the purchase does not itself determine whether the truck meets the instant asset write-off requirements.

TAFS primarily uses chattel mortgage finance for commercial truck purchases.

Does a Deposit Reduce the Truck's Cost for Instant Asset Write-Off Purposes?

A deposit changes how much money you borrow.

It does not simply change the underlying purchase price of the truck for tax purposes.

Does a Trade-In Reduce the Asset Cost Below $20,000?

Do not assume so.

The purchase of the new truck and disposal of the trade-in are generally treated as separate transactions for depreciation purposes.

Is the $20,000 Threshold GST Inclusive?

For a business registered for GST and entitled to a full GST credit, the relevant asset cost is generally considered excluding the GST that can be claimed.

If the business is not registered for GST, the GST is generally included in the asset cost.

Can I Claim GST and Depreciation on the Same Truck?

Potentially.

GST and depreciation are separate tax calculations.

The GST credit can affect the cost used for depreciation purposes.

Can I Claim the Entire Truck Finance Repayment?

The complete finance repayment should not automatically be treated as one deduction.

Finance principal, eligible interest and depreciation are separate issues.

Speak with your accountant about the appropriate treatment.

Does the Truck Need to Be Delivered Before 30 June?

The relevant test considers when the asset is first used or installed ready for use.

Simply ordering or paying a deposit may not be enough.

Can a Private-Sale Truck Qualify?

Potentially.

Eligible second-hand assets can qualify, although the GST and documentation position may differ from a dealer purchase.

Can an Auction Truck Qualify?

Potentially.

The final asset cost and when it is ready for business use are important.

Does TAFS Provide Tax Advice?

No.

TAFS arranges commercial asset finance.

Your accountant should advise on the instant asset write-off, truck depreciation, GST and other business vehicle tax deductions.

Finance Your Next Truck With TAFS

The $20,000 instant asset write-off can be useful for eligible smaller asset purchases, but most commercial trucks will cost more than the threshold.

That does not mean there is no tax benefit from buying a truck.

It means depreciation, GST, finance interest and the wider business position need to be considered separately.

Once you have confirmed the tax treatment with your accountant, TAFS can help structure the truck finance around your business, including the purchase amount, deposit, trade-in, term and balloon.

The Asset Finance Shop (TAFS) is a commercial asset finance brokerage based in Sydney.
Information on this page is general in nature and doesn't take your personal circumstances into account. Speak to a TAFS broker for options tailored to your business, and to your accountant regarding tax treatment.