Amongst this year’s controversial budget, one positive for the rural sector was a permanent increase to the instant asset write-off for small businesses.

From 1 July small businesses with an aggregated turnover of less than $10 million, can immediately deduct the cost of eligible depreciating assets costing less than $20,000.

The limit had previously been increased from $1000 to $20,000 for temporary timeframes, whereas the change in this year’s budget means the limit has been permanently increased.

Daniel Bartkowski is one of the partners at Darling Downs based rural and small business financial specialist Carrick Aland.

“The instant asset write‑off has seen very strong uptake across the farming community,” Mr Bartkowski said.

“From a practical perspective, it allows eligible businesses to immediately deduct the cost of smaller assets, rather than depreciating them over several years.

“This has made it a valuable tool for managing cash flow in profitable years, smoothing out seasonal income fluctuations, reinvesting quickly into farm operations and upgrading equipment without long-term tax delays.”

What assets are eligible under the $20,000 rule?

The write‑off generally applies to depreciating assets costing less than $20,000 (excluding GST if registered) that are:

• Used or installed ready for use in the business
• Used for income‑producing purposes

Common examples in a farming context include:

• UTV’s
• Portable Air Compressors
• Technology (GPS, monitors, computers)
• Office equipment

“If the asset is under the threshold and used in carrying on the business, it will generally qualify,” Mr Bartkowski said.

“Both new and second‑hand assets are eligible, as long as the asset meets the eligibility criteria, its age or prior use does not affect the deduction.

“With vehicles, the full purchase price needs to be under $20,000 in order to use the write-off not just the business portion of the asset equating to less than $20,000.”

Farm specific instant write-offs

While the $20,000 write‑off is useful, the real advantage for farmers lies in specific primary production concessions Mr Bartkowski explained.

“These allow immediate deductions with no dollar limit, making them far more powerful for larger capital investments,” he said.

1. Fodder Storage Assets

Farmers can claim an immediate deduction for the full cost of fodder storage assets in the year they are first used or installed. Examples include:

• Silos
• Hay sheds
• Grain storage facilities
• Feed storage systems

“This is particularly useful because there is no cost limit, meaning even large infrastructure projects can be written off upfront,” Mr Bartkowski said.

“This is especially valuable for improving drought preparedness and feed security.”

2. Water Facilities

Capital expenditure on water infrastructure is also fully deductible upfront. Examples include:

• Dams and tanks
• Bores and wells
• Irrigation systems
• Pumps and pipelines

3. Fencing Assets

Fencing used in primary production can also be written off immediately. Examples include:

• Boundary fencing
• Internal paddock fencing
• Exclusion fencing

“This allows farmers to undertake large-scale property improvements without being locked into long depreciation schedules,” Mr Bartkowski said.