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

In 2026, the relevant threshold is less than $20,000 per eligible asset for qualifying small businesses with aggregated annual turnover of less than $10 million.

From 1 July 2026, the $20,000 threshold has been made permanent for eligible small businesses using the simplified depreciation rules.

For truck buyers, the important point is that most commercial trucks cost considerably more than $20,000. A $120,000 rigid truck, $180,000 tipper or $250,000 prime mover cannot simply be claimed as an immediate $20,000 deduction. Different depreciation rules generally apply when the vehicle costs $20,000 or more.

The Asset Finance Shop (TAFS) arranges commercial truck finance for Australian businesses purchasing new and used trucks through dealers, private sellers and auctions.

This guide explains what the instant asset write-off for trucks means in 2026, who may qualify, what happens when a truck costs more than the threshold and how depreciation, GST and truck finance fit together.

What Is the Instant Asset Write-Off?

The instant asset write-off is part of the simplified depreciation rules available to eligible Australian small businesses.

Normally, a depreciating business asset is claimed over time.

The instant asset write-off allows an eligible business to claim the business-use portion of a qualifying asset as an immediate deduction in the income year the asset is first used or installed ready for use.

For eligible small businesses, the current threshold is:

Less than $20,000 per eligible asset.

The threshold applies to each individual asset.

The deduction reduces taxable income.

It does not mean the government gives the business the purchase price back.

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

The threshold is less than $20,000 per eligible asset.

That wording matters.

An eligible asset costing:

$18,000: may potentially qualify.

$19,999: may potentially qualify.

$20,000: does not fall below the threshold.

$50,000: does not qualify for the $20,000 instant asset write-off.

$200,000: does not qualify for the $20,000 instant asset write-off.

The business and asset still need to satisfy all of the relevant eligibility requirements.

Who Can Use the Instant Asset Write-Off?

Generally, the rules are aimed at eligible small businesses with:

• Aggregated annual turnover of less than $10 million
• Eligibility to use the simplified depreciation rules
• An eligible depreciating asset
• An asset costing less than $20,000
• Business use of the asset
• The asset first used or installed ready for use in the relevant income year

Your accountant should confirm whether your business qualifies before you rely on the deduction.

Can You Instantly Write Off a Truck in 2026?

Potentially, but the truck needs to cost less than $20,000 and satisfy the other requirements.

That means the instant asset write-off is more likely to be relevant to certain older or lower-value commercial vehicles than to a new prime mover or heavy rigid truck.

For example, an eligible business purchasing a used commercial vehicle for $18,500 may potentially qualify.

A business buying a $150,000 rigid truck cannot claim the complete purchase price as an instant asset write-off under the $20,000 threshold.

It also cannot simply deduct the first $20,000 immediately.

The asset falls into a different depreciation treatment because its total cost is at or above the threshold.

What Trucks Could Potentially Qualify?

Depending on the purchase price and eligibility requirements, the rules could potentially apply to some:

• Older rigid trucks
• Light commercial trucks
• Older tippers
• Vans
• Utes
• Trailers
• Smaller commercial vehicles

The vehicle being new or used is not the main issue.

The asset cost and eligibility rules are what matter.

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

Potentially, yes.

The instant asset write-off is not limited to brand-new assets.

An eligible second-hand truck may qualify where:

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

This can make the rules particularly relevant to businesses purchasing lower-value used commercial vehicles.

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

This is the more common situation for commercial truck buyers.

Prime movers, tippers, rigid trucks, refrigerated trucks and other heavy commercial vehicles will often cost considerably more than $20,000.

Where an eligible small business uses the simplified depreciation rules, higher-cost depreciating assets are generally dealt with through the small business depreciation pool rather than the instant asset write-off.

Eligible newly acquired pooled assets are generally depreciated at:

15% in the first income year

and

30% in later income years

Your accountant should confirm exactly how these rules apply to your business and truck.

Example: $150,000 Commercial Truck

Consider an eligible small business purchasing a truck for $150,000.

Because the vehicle costs more than the instant asset write-off threshold:

• The full $150,000 cannot be immediately deducted under the write-off
• The business cannot simply claim $20,000 immediately
• Depreciation generally applies under the appropriate rules

The business may still be entitled to substantial deductions over time.

The tax treatment is simply different from the instant asset write-off.

Instant Asset Write-Off vs Truck Depreciation

The easiest way to understand the difference is:

Instant Asset Write-Off

An eligible asset below the threshold may potentially be deducted immediately for the relevant business-use portion.

Standard or Simplified Depreciation

A higher-value truck is generally deducted over time according to the applicable depreciation rules.

For most Australian businesses purchasing commercial trucks, depreciation is therefore likely to be more relevant than the instant asset write-off.

The actual treatment depends on your business circumstances.

Does the Instant Asset Write-Off Mean You Get the Truck Cost Back?

No.

This is one of the biggest misunderstandings around the instant asset write-off.

It is a tax deduction, not a government payment.

If an eligible business claims a $15,000 deduction, it does not receive a $15,000 refund.

The deduction reduces taxable income.

The actual tax benefit depends on factors such as:

• Business structure
• Taxable income
• Tax rate
• Business-use percentage
• GST treatment
• Other deductions

For this reason, buying a truck purely because somebody says it is "tax deductible" can lead to the wrong decision.

The truck still needs to make commercial sense for the business.

Is the Whole Cost of a Truck Tax Deductible?

Not necessarily in one year.

For a truck above the instant asset write-off threshold, the purchase price is generally dealt with through depreciation rather than an immediate deduction.

There may also be separate deductions associated with operating and financing the truck.

These can potentially include eligible:

• Finance interest
• Depreciation
• Fuel
• Insurance
• Registration
• Servicing
• Repairs
• Tyres
• Tolls
• Driver costs
• Other commercial vehicle expenses

The treatment of each expense depends on the circumstances.

Speak with your accountant before relying on a particular deduction.

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

Potentially.

Paying cash is not what determines whether an asset qualifies.

A qualifying truck can potentially be financed and still receive the appropriate tax treatment.

TAFS primarily arranges commercial truck purchases using a chattel mortgage.

Under a chattel mortgage:

• The business owns the truck from settlement
• The lender registers security over the vehicle
• The business makes agreed repayments
• A deposit may be included
• A trade-in can contribute toward the purchase
• A balloon payment may be available
• The lender removes its security once the finance has been repaid

The finance arrangement and tax treatment are separate considerations.

Your accountant determines the applicable tax treatment.

TAFS handles the finance structure.

Does Financing a Truck Reduce the Tax Deduction?

The amount borrowed is not necessarily the amount used to determine depreciation or the instant asset write-off.

For example:

Truck purchase price: $150,000
Cash deposit: $30,000
Amount financed: $120,000

The fact that only $120,000 is borrowed does not mean the truck has become a $120,000 asset for tax purposes.

Likewise, putting down a larger deposit does not bring a higher-value truck under the $20,000 instant asset write-off threshold.

The purchase price and finance amount are separate concepts.

Does a Deposit Reduce the Truck Below the $20,000 Threshold?

No, not simply because less money is being borrowed.

Consider:

Truck price: $35,000
Deposit: $20,000
Finance: $15,000

The truck still cost $35,000.

The fact that the business only financed $15,000 does not automatically make it eligible for a less-than-$20,000 instant asset write-off.

A deposit affects the finance.

It does not simply change the underlying cost of the asset.

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

Do not assume that it does.

For example:

Replacement truck: $80,000
Trade-in: $30,000
Finance required: $50,000

The business should not automatically assume the truck now costs $50,000 for tax purposes.

The purchase of the new truck and disposal of the existing vehicle generally have their own tax treatment.

Your accountant should calculate the correct asset cost.

How Does GST Affect the $20,000 Threshold?

GST treatment can affect the asset cost used for tax purposes.

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

If the business is not registered for GST, GST may form part of the relevant asset cost.

This is important when the vehicle purchase price is close to the $20,000 threshold.

For example, do not simply look at the advertised vehicle price and assume whether it qualifies.

Ask your accountant which cost figure should be used.

Can You Claim GST on a Truck Purchase?

Potentially.

A GST-registered business may be able to claim an eligible GST credit where the truck is purchased for business use and the relevant requirements are satisfied.

Factors can include:

• Whether the business is registered for GST
• Business-use percentage
• Whether GST was charged
• Seller type
• Purchase documentation

A truck purchased from a GST-registered dealer may have a different GST position from a used truck purchased privately.

Can You Claim GST and Depreciation on the Same Truck?

Potentially.

GST and depreciation are separate calculations.

Where an eligible GST credit is claimed, this can affect the amount used when calculating depreciation.

Your accountant can determine:

1. The GST treatment
2. The depreciable cost
3. The applicable depreciation method
4. Any eligible finance interest deduction

What About the Business-Use Percentage?

Tax deductions generally relate to business use.

If a commercial vehicle is used entirely for business, the treatment may differ from a vehicle that is used partly for private purposes.

For example, if a vehicle is:

90% business use

the tax treatment may need to reflect that percentage.

Importantly, reducing the cost by the business-use percentage does not simply allow a vehicle that originally cost more than $20,000 to fall under the instant asset write-off threshold.

Ask your accountant to determine the correct treatment.

What About Passenger Vehicles?

Some business vehicles can also be affected by the passenger car depreciation limit.

This is particularly relevant where the vehicle is classified as a car rather than a commercial vehicle for tax purposes.

Many heavy trucks will not be treated in the same way as passenger vehicles, but classification matters.

If you are financing:

• A ute
• Dual-cab vehicle
• SUV
• Passenger vehicle
• Light commercial vehicle

ask your accountant whether any vehicle cost limits apply.

When Does the Truck Need to Be Ready for Use?

The timing of the deduction is generally connected to when the asset is first used or installed ready for business use.

Simply ordering a truck or paying a deposit does not necessarily mean the deduction belongs in that income year.

This matters particularly around 30 June.

If the tax treatment is part of your purchase planning, ask your accountant what needs to happen before the asset is considered ready for use.

What Does "Installed Ready for Use" Mean for a Truck?

For a truck, this generally means the vehicle is genuinely ready to perform the business function it was purchased for.

Depending on the transaction, there could still be outstanding work such as:

• Body fit-out
• Registration
• Equipment installation
• Compliance work
• Delivery
• Modifications

A truck sitting at a body builder or waiting on significant work may have a different timing position from one that is ready to operate.

Your accountant should confirm the relevant tax date.

Should I Buy a Truck Just to Get a Tax Deduction?

Usually, the starting point should be whether the business actually needs the truck.

A tax deduction can improve the after-tax cost of an asset.

It does not make an unnecessary truck free.

Before purchasing, consider:

• Does the business have work for the truck?
• Will it increase revenue?
• Will it replace an unreliable vehicle?
• Will it reduce downtime?
• Will it reduce subcontractor costs?
• Will it increase capacity?
• Can the business afford the repayments?
• How much working capital will remain?

The commercial decision comes first.

The tax treatment should support that decision rather than create it.

Can a Truck Above $20,000 Still Be Worth Buying Before Tax Time?

Yes.

Most trucks financed through TAFS will cost more than $20,000.

That does not mean there is no tax benefit or no reason to purchase before the end of an income year.

For example, a new truck may:

• Support a new transport contract
• Replace an unreliable vehicle
• Reduce maintenance
• Improve fuel efficiency
• Increase payload capacity
• Add another route
• Reduce subcontracting
• Improve operational reliability

The truck may also be eligible for depreciation and other deductions.

The instant asset write-off is only one part of the overall financial decision.

How Does a Chattel Mortgage Work With Truck Tax Deductions?

TAFS primarily arranges truck finance using a chattel mortgage.

The business owns the truck from settlement and repays the finance over the agreed term.

Tax and finance are then treated separately.

Finance Side

The business has:

• Purchase price
• Deposit
• Amount financed
• Interest rate
• Finance term
• Balloon where applicable
• Regular repayment

Tax Side

The accountant considers:

• GST
• Depreciation
• Instant asset write-off eligibility
• Finance interest
• Business-use percentage
• Other operating expenses

The fact that the truck is financed does not mean the tax deductions must wait until the loan has been repaid.

Is the Whole Chattel Mortgage Repayment Tax Deductible?

Generally, no.

A finance repayment generally contains:

• Principal
• Interest

The principal reduces the amount borrowed.

Eligible business-use interest may potentially be deductible.

The truck itself is dealt with through the appropriate depreciation or instant asset write-off rules.

The full loan repayment should therefore not simply be treated as a business tax deduction.

Does a Balloon Payment Increase the Tax Deduction?

Not automatically.

A balloon payment changes the finance structure.

It leaves an agreed amount outstanding at the end of the finance term, which generally reduces the regular repayment.

The balloon does not automatically create an additional deduction.

A business might use a balloon because it wants to:

• Keep regular repayments lower
• Preserve monthly cash flow
• Match finance to a planned truck replacement cycle

The tax treatment should still be confirmed separately.

Example: Truck Under the Instant Asset Write-Off Threshold

Consider an eligible small business purchasing a used commercial truck for:

Purchase price: $18,000

If the business:

• Meets the relevant turnover requirements
• Uses the simplified depreciation rules
• Uses the truck for business
• Meets all other requirements
• First uses or installs the truck ready for use in the relevant income year

it may potentially qualify for an immediate deduction for the eligible business-use portion.

That does not mean the business receives $18,000 from the government.

It means an eligible deduction may reduce the business's taxable income.

Example: Truck Above the Threshold

Now consider an owner-operator purchasing a prime mover for:

Purchase price: $220,000

The truck is well above the $20,000 threshold.

The operator cannot claim:

$220,000 as an instant write-off

and cannot simply claim:

the first $20,000 immediately

Instead, the truck is generally dealt with under the applicable depreciation rules.

The business may also separately consider:

• GST
• Finance interest
• Fuel
• Repairs
• Insurance
• Registration
• Other operating expenses

Example: Truck Financed With a Chattel Mortgage

Consider a business purchasing a $160,000 rigid truck.

The business contributes:

Deposit: $20,000

and finances:

$140,000

The instant asset write-off test is not simply based on the $140,000 loan balance or the amount of the deposit.

The truck purchase itself is the relevant asset transaction.

TAFS can structure the truck finance while the business's accountant determines the appropriate tax treatment.

What Truck Costs May Be Deductible?

Apart from depreciation, commercial vehicle expenses may potentially include:

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

These costs are separate from the instant asset write-off.

The treatment can depend on:

• Business structure
• Type of expense
• Business-use percentage
• GST registration
• Other tax circumstances

Keep accurate records and speak to your accountant about the applicable deductions.

What Records Should You Keep for a Truck Purchase?

Good record keeping can make tax time considerably easier.

Documents may include:

• Purchase invoice
• Finance agreement
• Deposit record
• Trade-in paperwork
• GST tax invoice
• Settlement statement
• Registration
• Insurance
• Business-use records
• Finance interest statements
• Servicing and repair invoices
• Fuel records
• Sale or trade-in documents when the truck is eventually disposed of

The records required will depend on the business and transaction.

What Should You Ask Your Accountant Before Buying a Truck?

Before purchasing a truck partly because of expected tax benefits, ask:

1. Does my business qualify for the simplified depreciation rules?
2. Is our aggregated turnover within the applicable limit?
3. Does this truck qualify for the instant asset write-off?
4. What asset cost should be used for the threshold?
5. Is that cost GST inclusive or exclusive for my business?
6. What is the business-use percentage?
7. Does any vehicle depreciation limit apply?
8. How will a truck above $20,000 be depreciated?
9. When must the truck be first used or ready for use?
10. What GST can be claimed?
11. How will finance interest be treated?
12. What other vehicle expenses can be deducted?
13. What happens when the truck is sold or traded later?

Getting those answers before settlement can make the tax and finance decisions much clearer.

How TAFS Can Finance a Commercial Truck

TAFS handles the finance side of the truck purchase.

Step 1: Review the Business and Truck Requirement

TAFS considers:

• ABN history
• Trading history
• Transport experience
• Available documentation
• Credit position
• Current work
• Proposed truck purchase

Step 2: Soft Credit Check

TAFS starts with a soft credit check that leaves no mark on the applicant's credit file.

Step 3: Internal Credit Review

The internal credit team assesses the application before the formal lender submission.

Step 4: Compare Suitable Lenders

TAFS has access to more than 80 bank and non-bank lenders.

The finance can be matched based on factors including:

• ABN age
• Financial documentation
• Truck
• Truck age
• Purchase method
• Credit profile
• Finance amount

Step 5: Structure the Truck Finance

TAFS can review:

• Purchase price
• Deposit
• Trade-in
• Amount financed
• Finance term
• Repayment
• Balloon

Step 6: Submit the Formal Application

Once an option has been selected, one formal application is submitted to the chosen lender.

Step 7: Approval and Settlement

TAFS coordinates the remaining lender and seller requirements through to settlement.

New and used trucks can be financed, including eligible purchases through dealerships, private sellers and auctions.

Frequently Asked Questions

What Is the Truck Instant Asset Write-Off in 2026?

The instant asset write-off allows eligible small businesses using the simplified depreciation rules to immediately deduct the business-use portion of eligible depreciating assets costing less than $20,000.

What Is the Instant Asset Write-Off Limit in 2026?

The threshold is less than $20,000 per eligible asset.

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

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

Yes.

From 1 July 2026, the $20,000 threshold has been made permanent for eligible small businesses with aggregated annual turnover of less than $10 million.

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

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

A $100,000 truck exceeds the threshold and would generally be dealt with under the applicable depreciation rules.

Can I Claim the First $20,000 of a $100,000 Truck?

No.

The threshold applies to the cost of the asset.

If the truck costs $20,000 or more, the business does not simply receive a $20,000 immediate deduction under these rules.

Can a Used Truck Qualify?

Potentially.

Eligible new and second-hand assets can qualify where all requirements are met.

Can a Truck Cost Exactly $20,000 and Qualify?

No.

The asset must cost less than $20,000.

Can a Financed Truck Qualify?

Potentially.

Whether a truck is financed does not itself determine whether the asset meets the instant asset write-off requirements.

Does a Deposit Reduce the Purchase Price for the Write-Off?

Not simply because less finance is required.

A deposit changes the amount borrowed, not automatically the underlying cost of the asset for tax purposes.

Does a Trade-In Bring a Truck Under the Threshold?

Do not assume that it does.

The replacement truck purchase and disposal of the existing vehicle generally need to be considered separately.

Is the Threshold GST Inclusive?

That depends on the GST position of the business.

For a GST-registered business entitled to the relevant GST credit, the cost used for tax purposes may generally exclude claimable GST.

Ask your accountant to confirm the correct amount.

Can I Claim GST and Depreciation on the Same Truck?

Potentially.

GST and depreciation are separate calculations.

The GST treatment can affect the depreciable cost of the asset.

Can I Claim the Whole Truck Finance Repayment?

Generally, no.

The repayment generally contains principal and interest.

Eligible interest may potentially be deductible while the truck itself is treated under the applicable depreciation rules.

Is Truck Finance Interest Tax Deductible?

Eligible business-use interest may potentially be deductible.

Speak with your accountant about your circumstances.

Can a Balloon Payment Be Claimed as an Instant Deduction?

Not automatically.

A balloon is part of the finance structure and generally represents principal remaining at the end of the loan.

Does the Truck Need to Be Delivered Before 30 June?

The relevant rule generally relates to when the asset is first used or installed ready for use, not simply when it is ordered or paid for.

Your accountant should confirm the timing for your transaction.

Should I Buy a Truck Just for the Tax Deduction?

The truck should first make commercial sense for the business.

Tax benefits can reduce the after-tax cost of a necessary purchase, but they do not make an unnecessary asset free.

Finance Your Next Truck With TAFS

The instant asset write-off can be useful for eligible lower-value commercial vehicles, but most trucks purchased by Australian transport businesses will cost more than the $20,000 threshold.

For those vehicles, depreciation, GST, finance interest and ongoing commercial vehicle expenses can all form part of the broader tax position.

TAFS can arrange the truck finance while you work with your accountant to confirm how the purchase should be treated for tax purposes.

TAFS has access to more than 80 bank and non-bank lenders and can arrange finance for eligible new and used trucks through dealerships, private sellers and auctions.

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.