Claiming Heavy Machinery on Tax: Excavators & Bobcats

Heavy machinery is a massive investment. Whether you are buying a 1.7t excavator or a Skid Steer, knowing how to treat the expense can save you tens of thousands in tax.

Chattel Mortgage vs Lease

How you finance the machine affects your tax.
Chattel Mortgage: You own the machine from day one. You can claim the GST upfront (in your next BAS) and depreciate the asset immediately.
Lease: You claim the monthly lease payments as a tax deduction. You don't claim depreciation.

General Depreciation Pool

If the machine costs more than the Instant Asset Write-Off threshold ($20,000 for 2026), you place it in the "Small Business Pool." You deduct 15% in the first year and 30% every year after that.