Recent IRD changes specific to FARMERS


The IRD has recently made a major change to the rules surrounding farmhouse expenditure.


Classification of farms falls into 2 categories called Type 1 & Type 2

  • Type 1 – Value of farmhouse (including curtilage & improvements) is 20% or less of the total value of the farm

    • Majority of full time farmers should meet this criteria

    • Expense deductions have reduced from 25% to 20% without supporting evidence i.e. for repairs & maintenance, electricity, insurance etc.

    • Farmers can do an actual calculation based on use if they consider the business use of the house is more than 20%

    • 100% claim for interest & rates relating to house

    • 50% claim for telephone rental unless supporting evidence for a greater percentage


  • Type 2 – Value of farmhouse (including curtilage & improvements) is more than 20% of the value of the farm (more a ‘hobby’ farmer)

    • Expense deductions limited to actual business use of house

    • Business % for interest & rates relating to house

    • Home office calculation for other expenses including the phone


Changes come into effect from the 1st day of the 2018 farming year.

  • For 31 March balance dates – changes effective from 1 April 2017

  • For 30 June balance dates – changes effective from 1 July 2017


Please contact us for advice to ensure that your calculations are accurate from the commencement of your new financial year.

Herd Values …

The IRD have recently announced this year’s livestock herd scheme values and we think this is a great opportunity to update you on the latest movements.  The herd scheme values are the national average market values as determined by a process involving a review of the livestock market as at 30 April. 


Click here for more detail of values.

Things to watch for


All contractors must have withholding tax deducted from payments i.e. shearers, fencers, administrative contractors etc. - for rates download an IR330C (Tax Rate Notification for Contractors) from the IRD website.

Ensure you have written & signed employment contracts for any employees and keep detailed records of holidays taken – from 1 April 2017 the minimum wage is $15.75.  There have been some severe fines where this hasn’t been done correctly.


Ensure you have written health & safety policies


Market rent must be arrived at for any house rented to an employee – this is regarded as a substitute for salary/wages paid in cash so must be added to the value of salary & taxed through the PAYE system accordingly.

Plan Change 6 relates to all landowners within the Tukituki catchment with a land area greater than 4ha – you must complete a Farm Environmental Management Plan (FEMP) without exception.