Optimising Tax Deductions for Heavy Machinery
19 August 2026 · 5 min read · By Heaney Accounting
Understanding Depreciation for Major Equipment
When you buy expensive gear like excavators or bobcats, you cannot claim the full cost in one hit unless specific write-off rules apply. Instead, you claim the decline in value over the life of the asset.
- Determine the effective life of the machine as per ATO guidelines.
- Choose between the prime cost or diminishing value method.
- Keep detailed records of the purchase date and professional installation costs.
- Include major capital improvements in your total asset value.
Pro Tip: Always keep a log of when the machine is used for business versus private use, as this directly affects your claimable percentage.
- Purchase price of the machinery
- Shipping and delivery fees
- Installation and commissioning
- Initial registration and licensing
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