The 2025 Federal Budget has brought to an end the decade-long ability of eligible small businesses to claim artwork purchases up to $20,000 as a 100% tax write-off.
The relief, first introduced on 12 May 2015 as part of the Small Business Measures legislation, will cease on 30 June 2025.
Other than artworks, the instant asset write-off applies to depreciating assets used by small business such as motor vehicles, office furniture, computers and equipment. It will no longer be available from 1 July.
From that date, depreciation for tax purposes will be calculated using either the ATO tax tables setting out the useful lives of assets or by resorting to the pooling rules. That will effectively reduce the amount a small business can immediately write off an asset purchase from $20,000 to $1000 for the 2025/26 financial year and beyond.
For the visual arts industry, the loss of this measure will be felt. It brings to an end one of its few truly stimulative measures and over 15 years of policy vacillation:
- 2009-11 instant artwork write-off capped at $6,500
- 2012-14 no instant artwork write-off
- 2015-20 instant artwork write-off capped at $20,000
- 2020-23 temporary full expensing allowed unlimited write-off of artworks, and
- 2023-25 instant artwork write-off capped at $20,000.
The timing could not be worse to end this measure and replace it with nothing. The visual arts is particularly vulnerable to economic slowdowns, particularly ones brought about by global uncertainty. It should also be noted the extension of the instant asset write-off from 30 June 2024 to 30 June 2025 has still not been made law!
In comments about the Federal Budget today, Prime Minister Anthony Albanese promised an announcement about the instant asset write-off during the forthcoming election campaign, but he chose to focus on the use of the measure for trades rather than for a broad incentive measure that would cover artworks.
Read: Federal Budget 2025-26: how does it benefit the arts?
Over a decade ago, Albanese was a Minister in the Federal Government that also removed artworks from the first instant asset write-off, introduced in the wake of the global financial crisis. This was achieved by restricting the measure to assets with a useful life, determined by the ATO, of 25 years or less. Artworks have a useful life of 100 years.
The Federal Opposition has promised to introduce a permanent instant asset write-off of $30,000 if it wins the next election. The fine details of this policy will need to be examined to see whether artworks continue to qualify as they currently do until 30 June 2025.
