Instant Asset Write-Off for EVs: What You Need to Know

The instant asset write-off has been one of the most talked-about tax incentives for business owners buying vehicles and equipment. If you are considering an EV for your business, understanding how this works (and whether it is currently available) is important.

Here is the overview.

What Is The Instant Asset Write-Off?

Under normal tax rules, when a business buys an asset like a vehicle, the cost is depreciated (written off) over several years. The instant asset write-off allows eligible businesses to deduct the full cost of the asset in the year of purchase, rather than spreading the deduction across the asset's effective life.

This brings forward a significant tax benefit. Instead of claiming a small deduction each year for several years, you claim the full amount in one hit.

Is It Currently Available?

The instant asset write-off (and its various iterations, including temporary full expensing) has been extended, modified, and reintroduced multiple times by the Australian Government. As at April 2026 (measure legislated to 30 June 2026—always confirm with the ATO or your accountant before relying on it), the headline settings often discussed are:

$20,000 instant asset write-off per asset for eligible businesses with aggregated turnover under $10 million, for assets first used or installed ready for use by the relevant deadline. Eligibility, caps, and exclusions change—verify the current law.

Because this changes frequently, always verify the current rules with the ATO or your accountant before making a purchasing decision based on this incentive.

How Does It Work For Evs Specifically?

If the instant asset write-off is available and your business is eligible, you can potentially deduct the full purchase price of an EV (up to any applicable threshold) in the financial year you purchase and first use the vehicle.

There are a few things to be aware of with vehicles specifically.

Car limit. The ATO sets an annual car limit, which caps the amount you can claim for the business use of a car. For the 2025–26 financial year, this limit is $69,674. If your EV costs more than this limit, you can only claim the limit amount, not the full purchase price.

Note that the car limit applies to passenger vehicles. If the EV is classified as something other than a car for tax purposes (some larger vehicles may qualify), different rules may apply. Check with your accountant.

Business use percentage. If the vehicle is used partly for personal purposes, the deduction is limited to the business use percentage. If you use the EV 70% for business, you can claim 70% of the eligible amount.

For more on how depreciation works for business EV buyers, see our guide on EV depreciation.

How Does It Interact With Finance?

The instant asset write-off applies to the cost of the asset, not to how you pay for it. Whether you pay cash, use a chattel mortgage, or use another finance structure, the write-off can still apply (subject to eligibility).

Under a chattel mortgage, you own the asset from day one, which makes claiming the write-off straightforward. Under a finance lease, the treatment may be different because the lender owns the asset. Your accountant can advise on the specifics.

For more on chattel mortgage, see our guide. For a broader look at business finance, see our guide for small business EV buyers.

Should The Write-Off Drive Your Buying Decision?

No. It should inform your timing and your finance structure, but it should not be the primary reason you buy a vehicle. Buy an EV because it makes sense for your business. Then use the write-off (if available) to improve the financial outcome.

Tax incentives come and go. A vehicle purchase is a commitment that lasts years. Make sure the asset suits your needs first, and treat the tax benefit as a bonus.

For a broader view of all EV incentives, see our guide on EV government rebates and incentives.

For general business finance guidance, visit Aussie Finance Hub.