Buying a Car for Business Use in Australia – Tax Write-Off (2025)
25 June 2025 · 5 min read · Count Right Tax & Accounting
Buying a vehicle through your business doesn't automatically hand you a big tax advantage. What you can actually claim depends on how the car is used, how well you document it, and which calculation method you use.
What Is a Business Car Tax Write-Off?
A tax write-off is an expense that can be deducted from your taxable income. The ATO allows businesses to deduct vehicle costs when the vehicle is used for business purposes, including running and maintenance expenses.
The deductible amount depends on the vehicle type, the percentage of business use, and the calculation method you choose.
Qualifying for the Deduction in 2025
- Primary business use: over 50% of the vehicle's use must be business-related
- Records: a logbook plus receipts for fuel, maintenance, insurance and registration
There are two ways to calculate the deduction:
The Instant Asset Write-Off
The instant asset write-off allows an immediate deduction for the business-use portion of an asset in the year it's first used. For the 2024–25 financial year, businesses with turnover under $10 million can immediately deduct the full cost of an asset valued below $20,000.
Before you buy: thresholds and eligibility rules change most years, and the vehicle generally needs to be used, or ready for use, before 30 June to claim it in that financial year. Talk to us first.
