Finance question
Are equipment finance repayments tax deductible?
Generally, yes in part. For business-use equipment the interest on the finance and the depreciation of the asset are usually deductible, while the principal portion of the repayment is not treated the same way. The exact treatment depends on the finance structure you choose and how the asset is used, so confirm the detail with your accountant. Ventas is a finance broker, not a tax adviser.
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The short answer
The interest and depreciation, not the whole repayment
When equipment is used to run your business, the tax system generally recognises two things. The interest you pay on the finance is usually a deductible business expense, and the asset itself usually depreciates, which can be claimed over time or, in some cases, more quickly. What is not simply deductible is the principal part of each repayment, because that is paying down the value of an asset you are acquiring rather than an expense.
How it all lands depends on the structure. A chattel mortgage, where you own the asset from the start, is treated differently from a rental or hire arrangement, and that changes how the deductions flow. This is exactly why the structure conversation matters, and why we quote the options rather than assume one fits. The finance decision and the tax outcome are linked.
The honest position is that we set up the finance, and your accountant confirms the tax treatment for your situation. Deductibility also depends on how much the asset is used for business versus private purposes. We can structure the deal to suit how you want to hold the asset, then you and your accountant confirm the claim. Ventas is a broker, not a tax adviser.
What affects your claim
The factors that shape deductibility.
The finance structure
Chattel mortgage, rental or hire treat deductions differently.
Business use
How much the asset is used for business affects the claim.
Depreciation
The asset usually depreciates, which can be claimed over time.
Your accountant
They confirm the exact treatment for your business.
Why structure and use drive the tax outcome
Interest is usually deductible
The finance cost on business equipment is generally claimable.
The asset depreciates
Depreciation can usually be claimed, separate from the repayment.
Structure decides the flow
How you hold the asset changes how the deductions work.
A real example
A joiner finances a $50,000 machine used entirely for the business. His accountant treats the interest on the finance as a deductible expense and claims depreciation on the machine, while the principal portion of the repayments is handled separately. The structure was set up with that outcome in mind. Illustrative only.
Common questions
Frequently asked questions
Is the whole repayment deductible?
No. The interest portion is generally deductible for business-use equipment, and the asset usually depreciates, but the principal portion of the repayment is treated separately. Your accountant confirms the detail.
Does the finance structure change the tax?
Yes. A chattel mortgage, rental or hire arrangement each treat deductions differently. We can structure the deal to suit how you want to hold the asset.
What if the asset is used privately too?
Deductibility usually depends on the business-use proportion. Mixed use can reduce the claim, so your accountant should confirm your position.
Can Ventas give me tax advice?
No. We are a finance broker, not a tax adviser. We set up the finance; your accountant confirms the tax treatment for your situation.