If you’re a small business owner in Australia, there’s a unique opportunity to enhance your workspace and reduce your tax bill simultaneously. Until June 30, 2025, eligible businesses can claim an immediate deduction of up to $20,000 for the purchase of artwork under the Instant Asset Write-Off scheme. This scheme has been altered over the past few years, however it is unclear if it will continue beyond the 2025 finical year.
What Is the Instant Asset Write-Off?
The Instant Asset Write-Off allows eligible small businesses with an aggregated annual turnover of less than $10 million to immediately deduct the business portion of the cost of eligible assets costing less than $20,000. This includes both new and second-hand items that are first used or installed ready for use between July 1, 2024, and June 30, 2025 .
Artwork, such as paintings and sculptures, qualifies as a depreciating asset and is eligible for this write-off. This means you can claim the full cost of the artwork in the year it’s purchased, rather than depreciating it over several years .
Why Invest in Art Now?
1. Enhance Your Business Environment
Investing in artwork can transform your office or workspace, creating a more inviting and inspiring environment for both employees and clients. A well-chosen piece of art can reflect your brand’s identity and values, leaving a lasting impression on visitors.
2. Support Local Artists
Purchasing artwork supports local artists and contributes to the cultural landscape of your community. It’s a meaningful way to invest in the arts while also benefiting your business.
3. Take Advantage of the Tax Benefit
With the Instant Asset Write-Off, you can claim the full cost of eligible artwork up to $20,000. This is a significant tax benefit that can improve your cash flow and reduce your tax liability for the 2024–25 financial year .
Act Before June 30, 2025
It appears that this is the final year that the Instant Asset Write-Off applies to artwork purchases. After June 30, 2025, the ability to claim a 100% tax deduction on artwork purchases up to $20,000 will end.
How to Claim the Write-Off
To claim the Instant Asset Write-Off for artwork:
1.Ensure Eligibility: Confirm that your business has an aggregated annual turnover of less than $10 million.
2.Purchase Eligible Artwork: Buy artwork that costs less than $20,000 and is first used or installed ready for use between July 1, 2024, and June 30, 2025.
3.Keep Records: Maintain records of the purchase, including invoices and proof of payment.
4.Lodge Your Tax Return: When lodging your tax return, include the artwork purchase under the Instant Asset Write-Off section.
For more detailed information, visit the Australian Taxation Office’s Instant Asset Write-Off page.
Ready to Invest?
Now is the perfect time to invest in artwork for your business. Not only will you enhance your workspace, but you’ll also take advantage of a valuable tax benefit before it expires. Explore local galleries or online platforms to find the perfect piece that aligns with your business’s aesthetic and values.
Disclaimer: This information is intended as a general guide and does not constitute financial advice. Please consult with a qualified tax professional to understand how the Instant Asset Write-Off applies to your specific circumstances.