Fixed Assets in 2025: A Guide for Australian Businesses

When it comes to building a resilient Australian business, fixed assets often form the foundation for long-term growth and stability. With 2025 ushering in new tax regulations and reporting standards, understanding how fixed assets work—and how they can be leveraged—has never been more important. From property and vehicles to specialised equipment, these assets influence everything from your balance sheet to your ability to secure finance.

What Are Fixed Assets, and Why Do They Matter?

Fixed assets are tangible, long-term resources that businesses use to generate income. Unlike inventory or cash, they aren’t intended for quick sale. Think commercial property, vehicles, plant machinery, computers, and even office fit-outs. In 2025, the definition of fixed assets remains consistent, but their strategic importance has grown as businesses seek to maximise value and minimise tax liability.

• Property: Warehouses, offices, and retail stores.

• Plant and Equipment: Manufacturing lines, commercial kitchen gear, medical devices.

• Vehicles: Delivery vans, company cars, trucks.

• Technology: Servers, computers, specialist software installations (if capitalised).

These assets are recorded on the balance sheet at purchase cost and then depreciated over their useful life. This not only affects your net profit, but also your borrowing power and ability to attract investors.

2025 Policy Updates: Depreciation and Tax Deductions

The Australian Tax Office (ATO) continues to refine asset depreciation rules to encourage business investment. In 2025, the temporary full expensing scheme—which allowed businesses to instantly write off eligible asset purchases—has concluded, but the instant asset write-off threshold has been updated. For this financial year, small and medium businesses (turnover under $50 million) can claim immediate deductions for assets costing less than $30,000 per asset, offering substantial tax relief for timely investments.

Key points for 2025:

• Assets over the threshold must be depreciated over their effective life, using either the diminishing value or prime cost method.

• Updated reporting standards under AASB 2025 require more detailed asset registers and impairment reviews, making accurate tracking essential.

• Green incentives: Some states offer additional deductions or grants for eco-friendly fixed assets, such as solar panels or energy-efficient machinery.

These changes mean business owners should re-evaluate their asset strategies, especially when planning capital expenditure or considering finance options.

Financing and Managing Fixed Assets

Fixed assets aren’t just a line on your balance sheet—they can also unlock funding and fuel expansion. Lenders often use fixed assets as collateral for secured business loans. In 2025, with interest rates expected to stabilise, asset-backed finance remains a popular way for businesses to access capital without diluting ownership.

Here’s how to make fixed assets work for you:

• Asset-Backed Loans: Use machinery or vehicles to secure finance at lower rates.

• Leasing vs. Buying: Leasing can preserve cash flow and may offer tax advantages, but purchasing builds equity and opens up depreciation deductions.

• Asset Management Systems: Invest in digital asset registers to comply with 2025’s stricter reporting rules and simplify insurance claims.

For example, a Melbourne-based logistics firm upgraded its vehicle fleet in early 2025, leveraging instant asset write-off for vehicles under $30,000 each and securing a bank loan using its warehouse as collateral. This not only improved operational efficiency, but also reduced taxable income for the year.

Making Fixed Assets Work for Your Business

Every fixed asset purchase should be part of a broader business strategy. Consider lifecycle costs, future-proofing (such as choosing energy-efficient models), and the evolving regulatory landscape. With 2025’s tighter compliance and tax changes, proactive management of fixed assets will be a key differentiator for Australian businesses looking to grow sustainably.

Whether you’re expanding your premises, upgrading equipment, or exploring green investments, understanding fixed assets is crucial to maximising value and minimising risk.