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Potential Tax Benefits for Farmers Installing Culverts


Potential Tax Benefits for Farmers Installing Culverts

Following the rains and recent damage to farms in the north island, farmers should be aware that there may be helpful tax deductions available to them when installing culverts on their farms as part of repairing land damage or even for certain land improvement activities. 

Type of expenditure Deduction available
The repair of flood or erosion damage to land In full in year of expenditure 

Income Tax Act 2007, Sec DO1

Drainage of swamps or low-lying lands


Usually non-deductible, but farms are allowed a unique tax concession spread over a number of years.

Income Tax Act 2007, Schedule 20

Construction of stream diversion channels, or other improvements for the purpose of conserving, conveying water for use on the land, or for preventing or combating soil erosion. As above
All culverts installed as part of a business activity Depreciation can be claimed at the applicable rates


Prepared by Rob Oosthuizen CA, Financial Controller, P&F Global

Note: The above is not provided as professional tax advice. We recommend you consult a tax agent when considering any of the above to ensure you are receiving the maximum tax concessions available to you in your industry and circumstances.