Riparian planting is tax deductible

Riparian planting and management is the restoration, enhancement and the construction of wetlands, rivers or streams inside a property.

As this type of planting is recognised as a method of erosion control and water protection, farmers are permitted a deduction for riparian plantings under the 2007 Income Tax Act 2007, Section DO 2 (2) (c).

The section permits a deduction for expenditure “in planting or maintaining trees or plants” for the purpose of “preventing or combating erosion of the land, and/or providing shelter to the land and/or preventing or mitigating detrimental effects on a watercourse or body of water from the discharge of farming and agricultural contaminants”.

This section overrides the capital limitation test.

All riparian planting costs ARE deductible under Section DO 1 (1) (f).

Should you require any advice on this topic, please contact our Farming Growth team.