Tradies rush to buy utes before Budget tax break ends
The one type of car Aussies are rushing to buy before a big tax break ends next month
Traditions rush to buy one car model before a huge tax break expires next month.
The Albanian government announced during Tuesday night’s budget that a popular tax write-off scheme that traders use to buy brand new work cars will be scrapped on June 30.
Artisans and small business owners now have less than two months to make the most of the tax credit before it drops to less than a third of the original discount.
The amount companies can claim on new equipment will drop from $65,000 to $20,000.
Traditions will rush to buy utes before the tax exemption expires.
Traditions rush to buy one car model before a huge tax break expires next month
To add to the pressure, the global auto manufacturing industry continues to face major delays due to inventory shortages and production delays.
The deduction will no longer be an immediate write-off of assets, as the deduction is made over three fiscal years instead of one.
It will also be limited to companies with less than $10 million in annual revenue.
It is a major pushback from the Albanian government after the measure was tightened during the first wave of the Covid-19 pandemic to allow companies with sales below $5 billion to write off assets below an unlimited threshold.
It is the lowest limit for the Instant Asset Write-Off scheme for new car purchases since its inception in 2011, capped at $57,000 in 2019.
The measure was due to expire on June 30 and the government has chosen not to extend it.
Small businesses with less than $10 million in revenue will still be able to immediately write off unlimited assets under $20,000 as long as it is “first used” or “installed ready to use.”
The rush to buy before tax time is expected to extend beyond just cars, including ovens, tools, and anything else that depreciates in value.
Small businesses can also spend $20,000 on linking their heating and cooling to solar or renewable energy, upgrading to more energy-efficient refrigerators and induction cooktops, and installing batteries and heat pumps.
These items can be claimed for tax during the life of the item – as part of the Small Business Energy Incentive – provided companies making the claim have sales of less than $50 million.
This was expected to cost the tax office $260 million in 2024-2025.
The scheme is not available for electric cars, renewable electricity generation assets, capital works and equipment that is off the grid and uses fossil fuels such as petrol.