Instant Asset Write-off and the Car Limit

Car limit

Instant asset write-off and the car limit

  • 14 September 2020

    If your business is eligible to claim the instant asset write-off, you need to consider the car limit. The car limit is the maximum depreciation expense you can claim for a car.

    The car limit applies to the cost of some passenger vehicles. It applies to passenger vehicles designed to carry a load less than one tonne and fewer than nine passengers. It does not apply to motorcycles or similar vehicles, or to vehicles fitted out for use by people living with a disability.

    The car limit is:

    • $57,581 for the 2019–20 income tax year
    • $59,136 for the 2020–21 income tax year.

    Here are some tips to help you get it right:

    • If the car limit applies to your vehicle, you can only claim a deduction for the business portion of the car limit.
    • To use the instant asset write-off you must have used your vehicle, or had it delivered ready for use, between 12 March and 31 December 2020.

    When calculating car depreciation amounts:

    • If you’re registered for GST and can claim the full GST credit, exclude the GST amount you paid on the car.
    • If you’re not registered for GST, include the GST amount you paid on the car.
    • You can’t claim the excess cost over the car limit under any other depreciation rules.

    Remember, registered tax agents can help you with your tax.

    Find out about:

This is general information only and does not take into account your financial situation, needs or objectives. Before acting, consider if the information is right for your needs. This information is based on our understanding of current Australian laws and assumes they will remain unchanged. 

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