Tradie ute loans triple as instant asset write-off is extended
Traders borrow big to buy a new utility vehicle or truck and receive generous tax breaks, with the number of financings doubling and tripling in a year.
The Commonwealth Bank, Australia’s largest lender, recorded an 187% annual increase in business loans for light commercial vehicles in May 2021.
The category includes small trucks.
Loans for utes and vans nearly doubled, climbing 85 percent.
The financing of SUVs and passenger cars increased by 36%.
As of October, business owners can deduct the cost of a new car from their income over a year instead of the usual eight.
Treasurer Josh Frydenberg in the May budget extended this until June 2023 to boost Australia’s post-Covid recovery.
Traders borrow big to buy a new ute and get generous tax breaks with funding levels doubling and tripling in a year. Pictured are construction workers in Sydney
Instant asset write-off, officially known as ‘full temporary write-off,’ was so popular that Commonwealth Bank Executive Director General of Business Loans Clare Morgan expected an increase this month .
“Funding and commercial vehicle registrations are generally expected to increase as the year-end approaches,” she said.
“We have seen the federal government’s Instant Asset Write-off program support many of our clients over the past year.
The Commonwealth Bank, Australia’s largest lender, revealed an 187% annual increase in business loans for light commercial vehicles in May 2021. Pictured is a Ford Ranger ute
What is Instant Asset Depreciation?
Instantaneous initial asset write-off, announced in the October 2020 budget, allowed businesses to purchase assets worth up to $ 150,000 and deduct them for tax
The program, officially known as the “full temporary transition” has been extended until June 2023
A business can claim an expense like a car – worth up to $ 59,136 – over one fiscal year rather than eight
“We expect this demand to continue after the recent budget announcement, and we welcome the extension of the program until mid-2023 as a major boost for Australian businesses.”
The Utes were Australia’s most popular cars in May, winning not only the top two spots, but also four of the top 10 spots.
The Toyota Hilux was the top seller again, with 4,402 sales, an increase of 24.8 from May 2020, according to data from the Federal Chamber of Automotive Industries.
Businesses can purchase a utility vehicle worth up to $ 59,136, which has enabled self-employed workers to purchase the more premium double cab workhorses that can also double as family weekends. four-wheel drive.
The HiLux SR5 is the volume seller.
Ford Ranger sales climbed 59.7 percent to 4,254, with the XLT crew cab selling more than the flatbed model.
Isuzu Ute D-Max sales tripled, increasing 202.8%, to 3,058, making it Australia’s fifth most popular vehicle.
The Mitsubishi Triton saw sales more than double, climbing 167.5% to 2317, Australia’s seventh most popular car.
Mazda BT-50 4×4 sales also doubled, increasing 108.7% to 1,225.
The instantaneous write-off of assets, officially known as ‘full temporary write-off’, has been so popular that Commonwealth Bank Executive Director General of Business Loans Clare Morgan expected an increase this month- this. Pictured is the Toyota HiLux, Australia’s most popular car in May
The Toyota RAV4 was Australia’s most popular SUV with 4,014 units sold last month, an annual increase of 71.2%.
Toyota LandCruiser sales climbed 59.4% to 3,399, although a new model is released in Australia later this year.
The HiAce was Australia’s most popular van with sales up 51.1% to 929.
The Federal Chamber of Automotive Industries defines utes as light commercial vehicles while the Commonwealth Bank uses this term to describe small trucks.
The bank groups utilities and vans into a separate category.
Isuzu Ute D-Max sales tripled, increasing 202.8%, to 3,058, making it Australia’s fifth most popular vehicle