What Is a Tangible Asset? Tangible vs Non-Tangible Assets in Australia (2025 Guide)

In the fast-evolving landscape of Australian finance, understanding what sets tangible assets apart from non-tangible ones is more important than ever. Whether you’re a small business owner, a property investor, or simply curious about your own wealth, knowing the difference can make a real impact on how you approach lending, investing, and tax planning.

Defining Tangible Assets: The Backbone of Real-World Value

Tangible assets are physical items you can touch, see, and use. Think of things like real estate, machinery, vehicles, or even the laptop you’re reading this on. These assets play a vital role in both personal and business finances—often serving as collateral for loans or as the foundation of a company’s value on the balance sheet.

• Examples for Australians: Residential properties, commercial premises, company vehicles, heavy equipment, and even livestock on a farm.

• How they’re valued: Tangible assets usually have a clear market value and can be appraised or sold relatively easily. Their value might depreciate over time (think cars or machinery) or appreciate (as seen in many Australian property markets through 2024 and into 2025).

• Recent policy update: The 2025 Federal Budget introduced accelerated depreciation for eligible small business assets up to $30,000, helping SMEs write off new equipment purchases more quickly.

Non-Tangible Assets: Value Beyond the Physical

Non-tangible assets, sometimes called intangible assets, don’t have a physical form but can hold significant value. These include intellectual property (like patents or trademarks), goodwill, brand reputation, and digital assets. In Australia’s knowledge-driven economy, the value of non-tangible assets is on the rise—especially in sectors like technology, media, and professional services.

• Examples: Copyrights, franchise agreements, software, customer databases, and even a popular brand name.

• Valuation challenges: Unlike tangible assets, these are often harder to value. Their worth can fluctuate based on market trends, legal protections, or changes in consumer sentiment.

• Key trend for 2025: With the ATO’s updated guidance on the tax treatment of digital assets and goodwill, more businesses are seeking specialist advice to maximise deductions and ensure compliance.

Why the Difference Matters: Loans, Tax, and Investment Decisions

Understanding the distinction between tangible and non-tangible assets isn’t just academic—it shapes real financial decisions:

• Financing: Banks and lenders typically prefer tangible assets as collateral, especially for asset finance or secured business loans. Non-tangible assets, while valuable, are rarely accepted as security on their own.

• Taxation: The way you claim depreciation or amortisation differs. Tangible assets like vehicles or machinery are usually depreciated, while non-tangible assets such as software or patents are amortised over their useful life. The 2025 budget’s changes to instant asset write-offs make this even more relevant for Australian SMEs.

• Investment strategy: For investors, tangible assets like property are prized for their stability, while non-tangible assets like shares in tech companies can offer growth—albeit with higher risk and volatility.

Consider the recent surge in demand for commercial solar installations in Australia. The solar panels themselves are tangible assets, eligible for depreciation and even government rebates in 2025. Meanwhile, the proprietary software that manages energy output is a non-tangible asset, offering value but requiring a different accounting approach.

Case Study: A Small Business Perspective

Let’s look at an example from the real world. Jenny runs a Brisbane-based design studio. Her tangible assets include her office lease fit-out, computers, and company car. She also owns non-tangible assets: her business’s brand, a custom project management app, and her loyal client list.

When Jenny applied for a business loan in early 2025, her lender primarily considered the resale value of her tangible assets as security. However, Jenny’s business valuation—especially if she ever sells—will factor in her non-tangible assets, such as her client relationships and proprietary software, which drive future earnings.

2025 Outlook: Digital and Tangible Assets Converge

The lines between tangible and non-tangible assets are blurring as Australian businesses invest more in technology. With government incentives for digital adoption and ongoing property market shifts, understanding both asset types is crucial for future-proofing your finances.

• Stay on top of tax rule changes for asset depreciation and digital assets.

• Review your balance sheet—are you underestimating the value of your brand or software?

• When seeking finance, present both tangible and non-tangible assets to show a complete picture of your business’s worth.