You can claim a deduction for capital expenses on a landcare operation for land in Australia if you are:
- a primary producer
- a business using rural land for a taxable purpose (except when mining or quarrying)
- an irrigation water provider (if your expenditure incurred on or after 1 July 2004).
Your deduction will be reduced if you use the land for a non-taxable purpose, such as your home.
For more information on landcare, see:
- LandcareExternal Link on the Department of Agriculture, Water and the Environment website
- Landcare and riparian maintenance – expenses (PDF, 250KB)This link will download a file fact sheet.
A landcare operation is one of the following:
- primarily and principally
- 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 using fences)
- erecting fences to keep animals out of areas affected by land degradation to prevent or limit the extension or worsening of land degradation in the area and to help reclaim the area
- constructing drainage works to control salinity or assist in drainage control
- erecting fences to separate different land classes in accordance with an approved land management plan
- constructing a levee or similar improvement
- a structural improvement or altering, adding, extending or repairing a structural improvement that is reasonably incidental to the construction of a levee or drainage works (only for expenditure incurred on or after 1 July 2004).
An irrigation water provider primarily and principally supplies water to primary producers or to businesses using rural land (except for a mining or quarrying business). Water suppliers who use motor vehicles (for example, water tankers) are not considered irrigation water providers.
An approved land management plan:
- 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
- has been prepared, or approved in writing, as a suitable plan by an
- authorised officer of the Department of Agriculture, Water and the EnvironmentExternal Link responsible for land conservation
- approved farm consultant – contact the Department of Agriculture, Water and the EnvironmentExternal Link for more information.
You can also find out more about Landcare tax benefits.External Link
If you recoup any of the money that you have claimed a landcare operations deduction for, it must be included in your assessable income.
You can only claim a deduction under the landcare provisions for capital expenditure on plant if it is on certain fences, dams or other structural improvements as defined in landcare operations.
If you can't claim a deduction under the landcare provisions, you can work out the decline in value using the general rules for depreciating assets.
If the costs were incurred by a partnership, a partner can only claim the deduction for their share of the expenditure.Primary producers may be able to claim a deduction for capital expenditure on landcare operations.