Landcare operations cover what were previously known as land degradation measures. You can claim a deduction in the year you incur capital expenditure on a landcare operation for land in Australia. The deduction is reduced if the land is not used wholly for either:
a primary production business, or
a business for the purpose of producing assessable income from the use of rural land – except a business of mining or quarrying.
A landcare operation is one of the following operations:
eradicating or exterminating animal pests from the land
eradicating, exterminating or destroying plant growth detrimental to the land
preventing or combating land degradation other than by the use of fences
erecting fences to keep out animals from areas affected by land degradation to prevent or limit further damage and help reclaim the areas
constructing drainage works - other than the draining of swamps or low-lying areas - to control salinity or assist in drainage control.
An approved land management plan is a plan that:
shows the different classes within the land and the location of any fencing needed to separate any of the land classes to prevent land degradation
describes the kind of fencing and how it will prevent land degradation, and
has been prepared by, or approved in writing as a suitable plan for the land by:
an officer of an Australian government agency responsible for land conservation who has authority to do so, or
an individual who was at the time approved as a farm consultant.
A register of authorised consultants who can prepare land management plans for the purposes of landcare deductions is held by the Commonwealth Department of Agriculture, Fisheries and Forestry. Information about gaining access to the register is available on the DAFF website .
No deduction is available if the capital expenditure is on plant unless it is on certain fences, dams or other structural improvements.
In each case, apart from the construction of a levee, the operation must be carried out primarily and principally for the purpose stated. This is to ensure that the deduction for expenditure on landcare operations and the three-year write-off for water facilities cannot both be claimed for the same item of expenditure. Where a levee is constructed primarily and principally for water conservation, it is a water facility.
If you are carrying on a primary production business on the land, you may claim the deduction even if you are only a lessee of the land.
Any recoupment of the expenditure would be assessable income.
These deductions are not available to a partnership. Expenses for landcare operations incurred by a partnership are allocated to each partner who can then claim the relevant deduction in respect of their share of the expenditure.
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