Header Image
We're here to help. We enjoy seeing our clients succeed in their business objectives.

Changes to Deductibility of Farm House Expenses for the 2018 Income Tax year onwards

The Inland Revenue has changed the deduction on farm house expenses reducing from 25% to 20%.

The deductibility now depends on the value of the farm house relative to the total farm.

If the value of the farmhouse (including curtilage and improvements) is less than 20% of the total farm value then the Farm is categorised as a Type 1 Farm and the following deductions apply for house related expenses:

  • Electricity - 20%
  • R&M Expenses - 20%
  • Mortgage Interest - 100%
  • Rates - 100%
  • Home Phone - 50%
  • Toll calls - Actual Cost

This calculation is more likely to apply to people on smaller blocks of land.

If the value of the farmhouse (including curtilage and improvements) is more than 20% of the total farm then the Farm is categorised as a Type 2 Farm and the following deductions apply for house related expenses:

  • Electricity - Based on the % calculation
  • Rates - Based on the % calculation
  • Mortgage Interest - Based on the % calculation
  • R&M Expenses - Based on the % calculation
  • Home Phone - 50%
  • Toll Calls - Actual Cost

We have a spreadsheet available to do the calculations or we can process the calculation for you and advise the correct percentages to claim.

Please give our office a call on 03 6879045.

Accounting & Tax
Accounting & Tax
Business Services
Business Services
Software / IT
Software / I.T.
Farming & Rural
Farming & Rural