Calculator
Chattel mortgage vs lease, after tax
Our lease vs buy calculator compares cash. This one picks up where that one stops: GST timing, and the difference between deducting interest plus depreciation versus deducting rentals. Both paths here pay out the residual and keep the asset, so the end position is identical and the comparison isolates tax.
GST is the difference nobody prices in
On a chattel mortgage your business owns the asset from day one, so a GST-registered business claims the entire GST credit on the purchase price in the BAS for the period it buys. On a lease the financier owns the asset and charges GST on each rental, so you claim that same GST back in instalments across the whole term.
The total GST is identical. The timing is not. On an $80,000 asset that is $8,000 either landing in your next BAS or trickling back over five years, which is a working-capital difference that routinely outweighs a rate gap of half a percent.
Interest plus depreciation, versus rentals
The buy path deducts the interest component of each repayment plus depreciation on the asset. The lease path deducts the rental payments. Rentals usually front-load the deduction relative to depreciation, which is why leasing can look better in the early years even when it costs more overall.
The exception is the instant asset write-off. Where the asset sits under the threshold and the business is eligible, the buy path deducts the entire business-use cost in year one, which is a deduction profile no lease can match. The calculator applies it automatically when the numbers you enter qualify.
What this does not model
Deliberately narrow, because the honest version of a tax calculator is one that says what it leaves out. It does not model the car limit for depreciation on passenger vehicles, luxury car tax, FBT on private use, whether the arrangement is a lease or a sale for tax purposes, balloon refinancing, fees, or the timing of your BAS cycle within a year. It assumes the residual is paid out on both sides rather than the asset being returned. Every one of those can move the answer.
Talk through your lease-vs-buy decision
The calculator gives you a clean side-by-side, but the real decision usually has tax, cash-flow and upgrade-cycle factors that the maths alone can't model. Happy to introduce you to an accredited broker to walk through your specific case.
Use this calculator on your own site
Brokers, accountants and equipment dealers are welcome to embed it free of charge. It collects nothing from your visitors unless they choose to make an enquiry, and the only condition is that you keep the attribution link.
General information only. This is not tax, accounting or credit advice, and it does not consider your objectives or financial situation. Company tax rates used are the current 25% base rate entity and 30% general rates. Confirm the treatment of any structure with your accountant before you commit. See our methodology and disclosures.