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 $1,000 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
- 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!
The centrepiece of the 2025 Federal Budget, other than freezing excise increases on beer for two years, is tax cuts to individual rates of taxation.
The major tax-related measures announced in the Budget include:
- Personal income tax rate cut – the tax rate for the income threshold ($18,200 – $45,000) will be cut from 16% to 15% (from 1 July 2026) and 14% (from 1 July 2027);
- Energy bill rebate- extended until the end of 2025, providing an extra $150 of relief ($75 per quarter);
- Help to Buy home scheme expanded;
- Child care subsidy – 3-day guarantee to replace activity test from January 2026;
- Ban on foreign ownership of housing – ATO to receive funding to enforce the ban on foreign residents from purchasing established properties;
- HELP debts – to be reduced by 20% and the repayment system will be moved to a marginal repayment system with a higher minimum repayment threshold;
- Employment contract non-compete clauses – to be banned for incomes up to $175,000.
The new tax cuts will be delivered over two years.
- From 1 July 2026, the 16 per cent tax rate, which applies to taxable income between $18,201 and $45,000, will be reduced to 15 per cent;
- From 1 July 2027, the 15 per cent rate will be reduced further to 14 per cent.
Resident Individual Taxpayer
The first tax cut provides a benefit of up to $268, the first and second tax cut provide a total tax benefit of up to $536.
Source: Budget Paper No. 2 page 5;
Budget Overview: Building Australia’s Future page 12 and Treasurer’s Media Release: New cost of living tax cuts under Labor, dated 25 March 2025
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Artwork image:
David Asher Brook
Study of Figure Reading (2024)
Oil on canvas
50cm by 58cm
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