Every June, Australian dealerships push hard on “EOFY deals.” For business owners with an ABN, there’s a real question worth asking: does buying a car before 30 June actually deliver a tax advantage? The answer is yes, but with some important caveats worth understanding before you sign anything.
The Instant Asset Write-Off
For the 2025–26 financial year, small businesses with aggregated turnover under $10 million can immediately deduct the full cost of eligible assets under $20,000, provided the asset is first used or installed ready for use by 30 June 2026.
That’s useful for tools, equipment and technology. For cars, however, the picture is more complicated.
Most Cars Don’t Qualify for Instant Write-Off
Most passenger vehicles cost more than $20,000, which means they won’t qualify for the instant asset write-off. Instead, they go into the small business depreciation pool, where they’re depreciated at 15% in the first year and 30% each year after.
So buying a car before 30 June doesn’t mean you can deduct the full cost in one hit, it means you start depreciating it from this financial year instead of next.
The Car Limit
For 2025–26, the car limit is $69,674. Even if you spend more than this, the maximum you can use to calculate depreciation is $69,674. The maximum GST credit is also capped at $6,334, one-eleventh of the car limit, regardless of what you paid.
Maximum depreciable amount: $69,674
Maximum GST credit: $6,334
These caps apply regardless of the actual purchase price.
Business Use Percentage Matters
If you use the car for both business and personal purposes, you can only claim the business-use portion. A logbook showing 65% business use means your deduction is calculated on 65% of the eligible cost.
The ATO expects you to keep a logbook. Without one, any claim is difficult to substantiate.
So What’s the Real Advantage of Buying Before 30 June?
The tax benefit of buying before EOFY versus after is largely one of timing, you bring the deduction forward rather than creating a larger one. The bigger advantage is often the commercial one: dealerships are under the most pressure to clear stock before 30 June, which means more negotiating room and more demo vehicles on the market.
- Instant write-off only applies to assets under $20,000, most cars don’t qualify
- Cars over $20,000 go into the depreciation pool: 15% year 1, 30% each year after
- Depreciation is capped at the car limit: $69,674 for 2025–26
- Only the business-use percentage is deductible, keep a logbook
- The real EOFY advantage is commercial: more stock, more motivated dealers
One Critical Detail
The asset must be physically ready for use in your business before 30 June 2026. Simply paying for it or signing a contract is not enough, the vehicle must actually be delivered and available for use.
This article is for general information purposes only and does not constitute tax advice. Individual circumstances vary significantly, speak with a registered tax agent or accountant before making any purchasing decisions based on tax considerations.
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