Here’s some important tax information in relation to farm properties following the recent federal budget kindly provided by BMT Tax Depreciation Quantity Surveyors.
Rural property owners will receive $153,637 more.
During the recent May 2015 federal budget, the federal government announced that farmers will be able to make additional claims from 7:30pm on the 12th of May 2015 in the form of instant deductions for fencing and water facilities. Previously, fences depreciated over a period of thirty years,
while most water facilities depreciated over three years and fodder storage assets over a period of up to fifty years. Primary producers will now be able to immediately deduct the cost of fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills. Fodder storage assets such as silos and tanks used to store grain and other animal feed will now depreciate over three years.
Many smaller farm businesses with an aggregated turnover of less than $2 million can also benefit from the budget’s broader small business initiatives. Their owners can choose to use either the accelerated depreciation for primary producers or the accelerated depreciation for small businesses for each depreciating asset. For example, if a sheep farmer was to invest $19,500 on a new silo to store feed, the farmer could choose to claim an immediate deduction of $19,500 for the silo under the small business rules, rather than choosing to depreciate the asset over three years under the new rules for primary producers.
Download PDF: Don’t fence in deductions for a farm
