17 Jun Outback Stouty: Hidden tax benefits when buying a farm

by Michael Stout

Over the last 12 months Michael and the team have been busy running around the country, completing farm depreciation reports in every state & territory in Australia. The following are case studies on a few of the properties.

Caste Study 1 – Dairy in Victoria Purchased $2.2M

Infrastructure List:

• 50 head rotary dairy
• machinery sheds
• calf sheds
• silos
• effluent ponds
• cattle lane ways
• 3 houses.

Total Depreciation: $1 400 000

Depreciation claimable in Year 1: $83 000 using diminishing value OR $383 000 using Small Business accounting rules.

Case Study 2 – Qld cattle station Purchased $3.4M

Infrastructure List

• 50 000 Ha
• 340km fencing
• 3 sets cattle yards
• 2 sets sheep yards
• 3 shearing sheds
• generator & house

Total Depreciation: $1 100 000

Depreciation claimable in Year 1: $30 000 using diminishing value depreciation OR $223 000 using Small Business accounting rules.

Case Study 3 – Northern Territory cattle station Purchased for $10M

Infrastructure List:

• 420,000 Ha
• 570km fencing
• 9 sets cattle yards
• several sheds
• generator & 2 houses

Total Depreciation: $3 500 000

Depreciation claimable in Year 1: $175 000 using diminishing value depreciation or $602 000 using Small Business accounting rules.

Case Study 4 – SA sheep & cattle farm Purchased for $4.95M

Infrastructure List:

• 4 200 Ha
• 120 km fencing
• 3 sets cattle yards & 1 set sheep yards
• shearing shed
• 2 machinery sheds
• 2 hay sheds
• 2 houses.

Total Depreciation: $1000 000.

Depreciation claimable in Year 1: $65 000 using diminishing value depreciation or $251 000 using Small Business accounting rules.

Case Study 5 – Central NSW mixed farm purchased for $2.9M

Infrastructure List:

• 700 Ha
• 31 km fencing
• sheep yards
• shearing shed,
• 3 machinery sheds
• 2 hay sheds
• workshop & 1 house.

Total Depreciation: $1 300 000

Depreciation claimable in Year 1: $73 000 using diminishing value depreciation or $301 000 using Small Business accounting rules.

Call Michael on 0427 692 418 for a free estimation of potential depreciation benefits on your farm.