Why It Matters

Australian primary producers get the most generous depreciation rules in the tax system.

The ATO recognises that farming carries unique capital intensity and seasonal cash flow risk. That's why fencing is 100% immediately deductible in the year incurred (no cost cap), water facilities get a 3-year accelerated write-off, and fodder storage assets are also immediately deductible. These primary producer concessions are dramatically more generous than the standard Division 40 effective lives that apply to commercial property.

A specialist QS site inspection captures items often missed: sheds and silos, livestock yards, irrigation pumps and channels, dam works, solar pumping, refrigerated storage, milking sheds, packing facilities, fuel storage tanks, workshop equipment, plus all the eligible plant within machinery sheds and processing buildings.

MCG has prepared depreciation schedules for farming operations across broadacre cropping, mixed farming, livestock (cattle, sheep, dairy), horticulture, viticulture, intensive agriculture, and agribusiness processing.

Quick Reference
Primary producer accelerated deductions

Fencing assets: 100% immediate deduction. No cost cap.

Water facilities: Dams, tanks, bores, pumps, troughs, irrigation channels. 3-year write-off (or immediate where eligible).

Fodder storage assets: Silos, hay sheds, grain bins, refrigerated storage. 100% immediate deduction.

Standard Division 40: All other plant and equipment depreciated per the ATO Effective Life Determination 2025.

Primary Producer Concessions

Accelerated deduction rules at a glance

Three categories of farm asset attract significantly accelerated deductions compared to standard Division 40 plant and equipment. These are the rules that often deliver the biggest year-1 deductions on a farm depreciation schedule.

Primary producer accelerated deductions · Australia · current as at April 2026
Asset category Deduction period Examples
Fencing assets100% in year 1Boundary fencing, internal fencing, cattle yards, sheep races, electric fences, gates
Water facilities3 yearsDams, tanks, bores, pumps, troughs, pipes, irrigation channels, windmills, solar pumping
Fodder storage100% in year 1Silos, hay sheds, grain bins, refrigerated storage, hay barns, fodder racks
Other Division 40 plantPer effective lifeTractors, headers, irrigation control gear, processing equipment, milking plant
Division 43 capital allowancesPer applicable rateSheds and other structural improvements where eligible

Eligibility for primary producer concessions depends on the entity satisfying the ATO's primary producer definition. MCG works with your accountant to confirm eligibility before applying the accelerated rates.

Why Use MCG

What you get from a specialist agricultural QS

Six things a generic accountant or self-prepared estimate cannot match.

On-farm site inspection
A registered tax agent QS attends the property to inspect every asset. Farms have asset spread across paddocks - no estimating from photos.
Accelerated rules applied correctly
Fencing, water and fodder concessions identified and applied. Many self-prepared schedules miss these and significantly understate deductions.
40-year compliant schedule
Full ATO-compliant 40-year report showing both Prime Cost and Diminishing Value methods, year-by-year, every asset.
Multi-property scope
Farms often span multiple titles and tenures. MCG handles aggregated multi-title schedules with paddock-level asset attribution.
3 to 4 week turnaround
From site inspection to delivered schedule. Larger or multi-property operations may take longer; we'll quote upfront.
Registered tax agent
MCG is a Tax Practitioners Board registered tax agent firm, not just a quantity surveyor. The schedule itself is tax deductible.
What's Depreciable

Depreciable assets typical to a farm

Two broad asset groups: the structures and infrastructure (sheds, fencing, water), and the operating plant and equipment.

Structures & Infrastructure

Capital improvements and accelerated-deduction items

Includes the items that benefit from primary producer concessions

  • FencingBoundary, internal, electric. 100% immediate deduction. No cost cap. Often the single biggest year-1 deduction on a farm schedule.
  • Water facilitiesDams, tanks, bores, pumps, troughs, irrigation channels, pipes, windmills. 3-year write-off.
  • Fodder storageSilos, hay sheds, grain bins, refrigerated cold storage, hay racks. 100% immediate deduction.
  • Sheds and machinery storageImplement sheds, workshops, machinery cover. Standard Division 40/43 treatment.
  • Livestock infrastructureYards, races, loading ramps, dipping plant, weighing equipment, milking sheds, dairy infrastructure.
  • Drainage and earthworksEligible drainage and contour banks treated as capital improvements with relevant write-off rules.
  • Solar pumping & renewable infrastructureSolar panels powering pumps and farm operations, separate Division 40 treatment.
Plant & Equipment

Operating machinery and Division 40 assets

Owner-supplied operating equipment depreciated over its effective life

  • Tractors and headersSelf-propelled farm vehicles. 12-year typical effective life. Subject to instant asset write-off thresholds where applicable.
  • Implements and attachmentsPloughs, planters, sprayers, balers, harvesters. Various effective lives by asset type.
  • Irrigation control gearPumps, controllers, monitoring systems, automated valves separate from Division 43 treatment of channels themselves.
  • Processing equipmentGrain cleaning, packing line, refrigeration plant, conveyors, weighing scales. Often high-value individually.
  • Workshop equipmentWelders, lathes, compressors, hand tools (where over the threshold), hoists. Standard plant treatment.
  • Fuel storage tanksAbove and below-ground fuel tanks, pumps, dispensing equipment.
  • Office and farmhouse fit-outOffice equipment, plus apportioned residence fit-out where used for income production.
How It Works

From enquiry to lodged schedule in 4 steps

A standard MCG farming depreciation engagement, end to end.

Send property details
Title details, settlement date, primary producer status, asset list (where available), construction or improvement records.
On-farm QS inspection
A registered QS attends the property, inspects sheds, fencing, water and irrigation, livestock infrastructure, and machinery storage.
Schedule prepared
40-year compliant schedule with primary producer accelerated rules applied to fencing, water and fodder. Both depreciation methods shown.
Lodge with your tax return
Hand the schedule to your accountant or use it for self-prepared returns. Schedule fee is itself tax deductible.
Mike Mortlock, Co-Founder and Managing Director of MCG Quantity Surveyors
Reviewed by

Mike Mortlock

Co-Founder and Managing Director, MCG Quantity Surveyors

Mike Mortlock is a registered tax agent and the co-founder of MCG Quantity Surveyors. He sits on the AIQS Advisory Board and the PIPA Board. MCG has prepared depreciation schedules for farming operations across broadacre cropping, mixed farming, livestock, horticulture, viticulture and agribusiness processing.

Registered Tax Agent (TPB) AIQS Advisory Board PIPA Board
Last reviewed: 26 April 2026 · Specialism: primary producer depreciation, agricultural property tax
FAQ

Common questions on farming depreciation

The questions farmers, agribusiness operators, and accountants ask MCG most often.

A farming depreciation schedule is a 40-year ATO-compliant report prepared by a registered tax agent and quantity surveyor that itemises every depreciable asset on an Australian farm or agricultural property. It captures both Division 40 plant and equipment (machinery, irrigation, fencing, sheds, livestock infrastructure) and Division 43 capital allowances. It also accounts for primary producer concessions including the immediate deduction for fencing assets and accelerated write-off for water facilities.
Three big ones: (1) Fencing assets are 100% immediately deductible in the year incurred, with no cost cap, for primary producers. (2) Water facilities (dams, tanks, bores, pumps, troughs, irrigation channels) are deductible over 3 years. (3) Fodder storage assets (silos, hay sheds, grain bins, refrigerated storage) are deductible immediately in the year incurred. These are significantly more generous than standard Division 40 effective lives.
Sheds, silos, hay sheds, livestock yards and races, fencing (immediate deduction), water tanks and bores, pumps and pumping equipment, irrigation systems, dams, drainage works, solar pumping, livestock processing equipment, refrigerated storage, dairies and milking sheds, packing sheds, stockyards, loading ramps, machinery sheds, fuel storage tanks, workshop equipment. Plus any farmhouse fit-out used for income-producing purposes.
Yes, when the machinery is owned by the farming entity (not leased). Tractors, headers, harvesters, balers, sprayers, ploughs, planters and other depreciable plant are itemised at their effective lives per the ATO Determination 2025. Many are also eligible for the temporary instant asset write-off thresholds applicable to small business primary producers.
Partially. The farmhouse itself is generally treated as a private residence (no depreciation), but any portion used exclusively for income production (farm office, packing area, accommodation for shearers/seasonal workers paid for by the business) can be apportioned and depreciated. A QS site inspection establishes the apportionment defensibly.
There are nuances. The cost base of inherited property may be the deceased's cost base or market value at death (depending on circumstances), and depreciation history transfers with the asset. Where assets are old or undocumented, MCG can reconstruct cost-base estimates using historical valuation methodology. CGT considerations also apply on eventual disposal - see our capital gains tax reports service.
Standard turnaround is 3 to 4 weeks from site inspection to delivered schedule for most farming properties. Larger or multi-property operations (multiple sheds, paddocks across titles, complex water and irrigation systems) may take 6 to 8 weeks. The QS attends the property in person to ensure no asset is missed.
Talk To An Expert

Maximise the deductions on your farm

Talk to an MCG agricultural depreciation specialist on 1300 795 170. Registered tax agents and quantity surveyors, working across rural Australia.

Request A Quote 1300 795 170
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