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Tax breaks for farmers

Are you a Primary Producer? You could claim now.

From the 12 May 2015 primary producers may claim the capital expenditure incurred on the construction, manufacture, installation or acquisition of water facilities, fencing and fodder storage assets which are principally used in a primary production business conducted on land in Australia. Primary producers will be allowed to:

  • Immediately deduct the cost of fencing and water facilities such as dams, tanks, bores, irrigation channels, pumps, water towers and windmills. Excluded from this measure is portable, stockyard or pen fencing.
  • Depreciate over three years the cost of fodder storage assets which are used principally for the purpose of storing fodder. The term 'fodder' takes on its ordinary meaning and refers to food for livestock usually but not exclusively dried, such as grain, hay or silage. Fodder can include liquid feed and supplements. For a fodder storage asset to satisfy the 'primarily and principally' test, its main purpose (other than some incidental or other minor purpose) must be to store fodder. Typical examples of fodder storage assets include silos, liquid feed supplement storage tanks, bins for storing dried grain, hay sheds grain storage sheds and above-ground bunkers.

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.

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