Finance Solutions
Asset & Car Finance
The right finance type can change your tax outcome
A new work vehicle, a piece of equipment, fit-out or technology: the asset is the easy part. How you finance it decides who owns it, when you can claim GST, and what you deduct each year.
TaxProof explains the tax treatment of each option so you can choose with confidence. Through our strategic partnership with Rediscover Capital Finance, you also have access to brokers who compare vehicle, equipment and business asset finance across a broad range of lenders.
How common finance types are generally treated for tax
| Finance type | Who owns the asset | GST credits (if registered) | What you generally claim |
|---|---|---|---|
| Chattel mortgage | Your business, from the start | Usually claimed upfront in your BAS | Depreciation plus interest, for the business-use portion |
| Finance lease | The lender, during the lease | Claimed on each payment | Lease payments, for the business-use portion |
| Novated lease | Employee arrangement through the employer | Handled by the employer | Salary-packaged; fringe benefits tax applies, with an exemption for eligible battery electric cars (plug-in hybrids generally no longer qualify from 1 April 2025) |
This is a general guide only. The right choice depends on your cash flow, GST status, business-use percentage and plans for the asset.
Tax points worth checking before you sign
Business-use percentage
You can generally only claim the business portion. For vehicles, that usually means a valid logbook or another accepted method.
Car limits
Depreciation on passenger cars is capped at the car limit, which changes each year.
Write-offs and depreciation
Small business depreciation rules and instant asset write-off thresholds change often. We'll confirm what applies in the year you buy.
Timing
Buying before or after 30 June can move deductions into a different year.
How it works
Tax comparison. We compare how each finance type would affect your GST, deductions and cash flow.
Introduction. We connect you with Rediscover Capital Finance, who find a lender and product that suit your business.
Set up correctly. We record the asset, loan or lease properly and claim GST in the right period.
Year-end. Depreciation, interest and business-use records are ready when your return is prepared.
Common questions
Is a chattel mortgage better than a lease?
Neither is better in every case. It depends on your GST position, cash flow and whether you want to own the asset. We'll model both.
Does TaxProof arrange car or equipment finance?
No. Finance is arranged through our strategic partner, Rediscover Capital Finance. We advise on the tax treatment and keep your records in order.
Buying a vehicle or equipment?
Check the tax first, then let our lending partner, Rediscover Capital Finance, find the finance.
Lending services are provided by Rediscover Capital Finance (Australian Credit Licence 389328). TaxProof does not provide credit assistance or lending advice; we refer clients to our lending partner with their consent. Information on this page is general in nature and doesn't take your personal circumstances into account.