Tax deductions on land

[Brenda Irwin]

This is something I've often wondered at. If I were to buy some land and lease it to a grazier for his cattle/horses as agistment would the interest payments and council rates then become tax deductable?

[Simon]

I believe that if the land is producing assessable income then the costs are deductible.

Cheers,

[Mry]

Yes. (enter obligatory 10 characters here so I can post.)

[asdf]

I believe its even OK if you had the intention to build on it but never end up actually building on it. I think Julia from bantacs wrote a piece on it in one of her very valuable newsletter. But if its rural, then I'm not sure if any of the farming rules would apply. How big is your land? From my very limited research, owning semi-rural land is very expensive cos any agistment/leasing fees barely pay for the running costs of maintaining the land let alone service debt. I suppose it depends what you're agisting... pot plantations could get you considerable more income... and behind bars too.... :)

[Ajax]

What is a more interesting question is "What is the bare minimum that I would need to do with my land to be classified as a Primary Producer by the ATO?" and "If I am classifed as a Primary Producer what tax benefits/tax concessions will that entitle me to?".

BTW I don't know the answers...used to be a few goats on the land would suffice. I've read that this is no longer the case".



Ajax

[redwing]

Ajax..

I'm wondering whether the 'size' of the block of land would come into play as well?

I have heard conflicting reports about claiming interest etc on a piece of suburban land as asdf has said...some people have advised they have even spoken to the ATO though and been told they 'can' claim on a block of land even if it is not producing income..it all comes down to the intent, if you have plans, engaged a builder etc etc ?

REDWING

[Bill.L]

Hi all,

Brenda, around this area you get $100-$140 per acre /per annum for leased land. The chances are it will be a very poor yield compared to purchase price often around 2-3%.

As others have said if you do lease it out it, the costs associated should be tax deductable. It would be like any other property you own.

If you tried to be a "Collins st farmer" ie run it as a business then there are the usual hurdles to overcome regarding amount of turnover, value of asset, profitable in 3 of the last 5 years etc.

Thats right it's "Pitt st farmer" for you northerners (north of the Murray River) :D

bye

[Bill.L]

Hi again,

Redwing,

Size does not matter, it is how you use it.

Hmmm, now where have I heard that before??? ;)

bye

[Brenda Irwin]

Whilst it is unusual to see the value of a house rise to five times the original price during one cycle, I have seen evidence of land doing so. This seems particularly so since the SE Qld plan to designate subdivision areas. I was just thinking, it might be an option to grab some acreage in an urban footprint, lease it out to horse/cattle owners, wear the negative returns but claim the tax deductions to help, and maybe sell or subdivide the land myself during the next cycle. Look in the interactive mapping on this site www.oum.qld.gov.au/ I like the Marburg area. You wouldn't believe how small the town is. My town of Lowood is only a few km's from there and also has a fair amount of urban designated area.