Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Deductions - Farming and aquacultural business expenditure

DO 1: Enhancements to land

You could also call this:

“Expenses for improving farmland that you can claim as deductions”

You can claim a deduction for certain expenses if you run a farming or agricultural business on land in New Zealand. These expenses include:

You can get money back for removing weeds or plants that are bad for your land. You can also claim for getting rid of animal pests that harm your land.

If floods or erosion damage your land, you can claim the cost of fixing it. You can also claim for clearing scrub, stumps, or undergrowth from your land.

Building fences for farming or agricultural reasons is covered too. This includes buying wire or wire netting to make new fences or to make existing fences rabbit-proof.

You can claim for regrassing and fertilising your pasture, but only if it’s not part of a big, expensive project.

Even though these things might seem like they make your property more valuable, you can still claim them as expenses. However, you still need to follow the general rules about what you can claim, and the expense must be for your farming or agricultural business.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513915.

Topics:
Money and consumer rights > Taxes
Environment and resources > Farming and fishing
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DO 2: Plantings for erosion, shelter, and water protection purposes, or

“Tax deductions for protective plantings on farmland”

Part D Deductions
Farming and aquacultural business expenditure

DO 1Enhancements to land

  1. A person is allowed a deduction for expenditure that they incur on the following in carrying on a farming or agricultural business on land in New Zealand:

  2. the destruction of weeds or plants detrimental to the land:
    1. the destruction of animal pests detrimental to the land:
      1. the repair of flood or erosion damage to the land:
        1. the destruction of scrub, stumps, or undergrowth on the land:
          1. the clearing or removing from the land of scrub, stumps, or undergrowth:
            1. the construction on the land of fences for farming or agricultural purposes, including buying wire or wire netting for the purpose of making new or existing fences rabbit-proof:
              1. the regrassing and fertilising of all kinds of pasture, if the expenditure is not incurred in the course of a significant capital activity.

                1. This section overrides the capital limitation. The general permission must still be satisfied and the other general limitations still apply.

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                Notes
                • Section DO 1 heading: amended (with effect on 1 April 2011), on , by section 31 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).