To further support Australian businesses through the COVID-19 induced economic slump, the government has extended the $150,000 instant asset write-off for an additional six months to 31 December 2020.
Initially announced on 12 May and intended to last until the end of June, the government’s $17.6bn stimulus package in part temporarily increased the threshold of the instant asset write off up from $30,000.
With the tax break, businesses with annual turnover of less than $500m can invest in assets to support their business as the economy reopens and health restrictions continue to be eased; now, with the extension to the end of the calendar year, businesses have more time to acquire and install the assets, whether they be new or second-hand.
The government hopes this measure, which will support over 3.5 million businesses, will encourage business owners to follow through with the investment they already had planned before the unforeseen circumstances of the last several months, and galvanise others into executing investment sooner than intended to support economic growth over the near term.
The instant asset write-off threshold applies on a per asset basis, so eligible businesses can write-off multiple assets so long as each costs less than $150,000.
The extended measure is forecasted to have a cost to revenue of $300m over the forward estimates period.