How can the 2026 Federal Budget help your business grow while reducing your tax bill? If you are looking to upgrade your commercial fleet or buy a new ute, the latest announcements from Canberra bring some of the most significant changes to business finance in recent years.
Treasurer Jim Chalmers handed down the 2026-27 Australian Federal Budget on 12 May 2026. This budget introduces long-term certainty for small business owners through a permanent shift in how assets are treated for tax purposes. At Simple Loans, we act as a finance comparison tool to help you navigate these changes and find funding that may suit your specific business goals.
Understanding these rules could be the difference between a major tax saving and a missed opportunity this financial year. Let us look at what the 1 July 2026 changes mean for your next vehicle purchase.
The Instant Asset Write-Off Goes Permanent
The biggest news for small businesses in the 2026-27 Budget is the decision to make the $20,000 Instant Asset Write-Off permanent from 1 July 2026. Previously, this measure was often extended on a year to year basis, making it difficult for business owners to plan their long term equipment and vehicle cycles.
If your business has an annual turnover of up to $10 million, you can generally claim an immediate deduction for the full cost of eligible assets costing less than $20,000. This applies to each individual asset, meaning you could potentially write off multiple items in a single year if they meet the criteria.
For those considering vehicle finance, this threshold remains a key figure. While many new commercial vehicles cost more than $20,000, this measure still provides a significant boost for purchasing used vehicles, specialised trailers, or workshop equipment. For more expensive vehicles, other depreciation rules or the new loss carry back measures may apply.
New Incentives for Electric Vehicles and Fuel
The government is also focusing heavily on the cost of transport and the transition to greener fleets. From 1 April 2026, a 32 cents per litre fuel excise cut will be in place for three months to provide immediate relief to transport and logistics operators. This is supported by a $14.8 billion Strengthening Australia's Fuel Resilience package.
If you are looking at /business-finance for a new electric vehicle, the 2026-27 Budget provides some clarity on Fringe Benefits Tax (FBT). The full FBT exemption for electric vehicles (EVs) priced under $75,000 will remain until 1 April 2029.
Additionally, a permanent 25 percent FBT discount for EVs priced over $75,000 will commence from 1 April 2027. These measures may make electric cars and vans much more affordable for businesses looking to lower their long term operating costs and carbon footprint.
Support for Manufacturing and Logistics
The 2026-27 Budget allocates $1 billion in interest-free loans specifically for manufacturing and logistics businesses that have been impacted by recent fuel crises. This is a targeted measure designed to keep the supply chain moving during volatile economic periods.
Furthermore, the R&D tax offset has been boosted by 25 to 50 percent for core experimental research. The turnover threshold for the refundable offset has also been lifted to $50 million. If your business is involved in developing new transport technologies or logistics software, these changes could provide a significant capital boost.
To help with cash flow management, the government is introducing an option for monthly PAYG instalments from 1 July 2027. This allows businesses to align their tax payments more closely with their actual income, rather than waiting for quarterly reporting cycles.
Enhanced Loss Carry Back and Tax Offsets
To support businesses that are investing heavily in growth, the two year loss carry back measure for companies with turnover up to $1 billion will start on 1 July 2026. This allows companies to use current losses to offset tax paid in previous years, potentially resulting in a much-needed tax refund.
For sole traders and individuals, a new $1,000 instant tax deduction for work related expenses (requiring no receipts) begins in the 2026-27 financial year. Additionally, more than 13 million workers will benefit from a new $250 Working Australians Tax Offset starting in 2027-28.
While these measures are designed to stimulate the economy, it is important to remember that tax laws are complex. How these measures apply to your business will depend on your specific structure and income. You should always consult with a qualified tax accountant before making major purchase decisions based on tax incentives.
Navigating Business Vehicle Finance
When you decide it is time to upgrade your business vehicle, the next step is finding the right finance. Interest rates for business loans can vary significantly. Some lenders may offer rates starting from 5.99% p.a., while other products could range up to 29.99% p.a. depending on your credit profile and the age of the asset.
Using a finance comparison tool like Simple Loans allows you to see different options in one place. Whether you are looking for a chattel mortgage, a commercial hire purchase, or a fleet lease, comparing different lenders helps you understand the total cost of the loan beyond just the monthly payment.
For those ready to see what their options look like, you can get a /quick-quote to start the process. Having your finance pre-approved can put you in a stronger bargaining position when visiting dealerships, especially when trying to secure a vehicle before the end of the financial year.
FAQ: Business Finance and the 2026 Budget
Can I claim the $20,000 write-off on a used car?
Yes, the instant asset write-off generally applies to both new and second-hand assets, provided they are used for business purposes and cost less than the $20,000 threshold. If the car is used for both business and private use, you can only claim the portion related to business use.
Does the negative gearing change affect my business property?
The 2026-27 Budget limits negative gearing to new builds only from 1 July 2027. Existing investors are grandfathered, meaning their current arrangements remain unchanged. This primarily impacts residential investment property rather than commercial equipment finance, but it is a significant shift in the broader tax landscape.
When do the new EV tax discounts start?
The full FBT exemption for EVs under $75,000 is currently active and will stay until 1 April 2029. The new 25 percent FBT discount for electric vehicles over $75,000 is scheduled to begin on 1 April 2027. These dates are important to track if you are planning a fleet transition.
What is the new rule for discretionary trusts?
From 1 July 2028, a 30 percent minimum tax will apply to discretionary trust income. This is designed to create a floor for tax payments within these structures. There is a three year rollover relief period provided to allow families and business owners time to adjust their financial planning.
Secure Your Business Finance
The 2026-27 Federal Budget has laid out a clear path for small business investment by making the instant asset write-off a permanent fixture of the Australian tax system. If your business is ready to invest in new vehicles or equipment, now is a great time to compare your finance options. Using our comparison platform could help you find a loan that fits your budget and helps you take advantage of these new tax measures. Visit our website today to get started with a quick quote and see how we can help you move your business forward.
Simple Loans is a finance comparison tool. AFCA member 96925. Australian Credit Licence 509582. Information is general only and does not constitute financial advice.
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