Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Deductions - Farming and aquacultural business expenditure

DO 10: Farming or horticulture expenditure of lessor or sublessor

You could also call this:

“Deductions for land improvements when renting to farmers”

If you own land in New Zealand and rent it out to someone who uses it for farming, this law might apply to you. It’s about how you can claim money back for some of the costs you might have while renting out your land.

You can claim money back if you spend money on the land in certain ways that the law allows. This includes things like improving the land for farming. You can also claim money back if someone else spends money on your land in specific ways that the law allows.

When you claim this money back, the law treats you as if you were doing the farming yourself, even though you’re just the landowner. This means you can use the same rules that farmers use to claim money back for their expenses.

Remember, this only applies if you own the land outright or if you’re renting it from someone else and then subletting it to a farmer. The farmer must be using your land for farming or growing plants (horticulture).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513963.

Topics:
Money and consumer rights > Taxes
Housing and property > Land use
Business > Industry rules
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DO 9B: Meaning of diminished value, or

“How to calculate the remaining value of land improvement costs you can claim”

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DO 11: Improvement destroyed or made useless, or

“Tax deduction for destroyed or unusable business land improvements”

Part D Deductions
Farming and aquacultural business expenditure

DO 10Farming or horticulture expenditure of lessor or sublessor

  1. This section applies when a person—

  2. is the owner of an estate in fee simple or of a leasehold estate in land in New Zealand; and
    1. grants a lease or a sublease of the land to a person who carries on a farming or agricultural business on the land; and
      1. in the term of the lease or sublease,—
        1. incurs expenditure relating to the land for which they are allowed a deduction under any of section DO 1, DO 2, DO 4, DO 5, or DO 6; or
          1. is allowed a deduction under section DO 4(2), DO 5(2), or DO 6 for expenditure incurred by another person relating to the land.

          2. Sections DO 1, DO 2, DO 4, DO 5, and DO 6, whichever is applicable to the person, applies as if the person were personally carrying on a farming or agricultural business on the land at the time they incur the expenditure or are allowed the deduction.

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