Farm shed grants, loans and tax write-offs are a hot topic, particularly ahead of June 30! Are there still tax write-offs for farm sheds? Can I apply for an RAA loan for my project? How do I access the drought infrastructure fund?
In this article, we provide an overview of some of the main low-interest loans, funding and tax incentives available that you may be able to take advantage of.
You might be familiar with many of these already such as the fodder storage asset write-off. Primary producers can take advantage of this for hay sheds storing fodder for livestock.
However, with the temporary full expensing reverting to the instant asset write-off with a $20,000 limit – there are a lot of enquiries about what financial assistance or tax benefits are available for farm shed projects in general.
We’ve collated some options with drought relief, sustainability and innovation a strong focus of the incentives.
Please note, that many of the incentives do not explicitly state that they can be used for farm sheds, but it would be worth enquiring to find out if you can take advantage of these.
We hope this is helpful!
Grants, Loans & Tax Write-Offs For Farm Sheds In Australia
Read on to learn about the tax write-offs for farm sheds, infrastructure loans and funds available Australia-wide.
These include:
- Instant Write-Off For Fodder Storage Assets
- Drought Loan
- Farm Investment Loans
- Agri Starter Loans
Where possible we have included a summary of the main eligibility requirements, potentially eligible shed projects and the closing date.
1 . Instant Write-Off for Fodder Storage Assets
The fodder storage asset write-off was introduced several years ago by the federal government as part of the drought assistance program.
The incentive was extended in the 2024-25 Federal Budget and allows eligible primary producers to claim an immediate deduction for capital expenses incurred on fencing and fodder storage assets.
How Does Fodder Storage Asset Write-Off Work?
How does this tax write-off work? How can you benefit?
This incentive works by allowing eligible primary producers to deduct the full cost of eligible assets from their taxable income. By reducing their taxable income the primary producer is able to reduce their tax payable.
For example:
- Kevin builds a hay shed to store hay to feed his sheep. The hay shed costs $80,000.
- Kevin’s taxable income is $250,000. Using his hay shed as a tax deduction, Kevin can reduce his taxable income by $80,000, reducing it to $170,000.
- As a result, Kevin pays tax on an income of $170,000 rather than $250,000.
Eligibility Requirements
Here is a summary of the main definitions and eligibility requirements that you need to be aware of.
Fodder Storage Asset
“A fodder storage asset includes a structural improvement, a repair of a capital nature, or an alteration, addition or extension, to an asset or structural improvement, that is a fodder storage asset.”
Fodder
The ATO defines fodder as “food for livestock, such as grain, hay or silage. It can include liquid feed and supplements, or any feed that could fit into the ordinary meaning of fodder.”
Primarily and Principally
Primarily and principally means that the main purpose of the asset must be to store fodder for livestock.
An example provided by the ATO is “if you built a shed for the purpose of storing hay but occasionally use it to store a neighbour’s tractor, it would still meet the ‘primarily and principally’ test because its main purpose is to store fodder.”
The ATO provides more examples and information on how this applies to dual-purpose assets here.
Examples of Eligible Assets
Examples of eligible fodder storage assets include:
- Hay Sheds
- Grain Sheds
- Grain Bunkers
- Grain Bins
- Silos
Visit the ATO website to learn about the eligibility requirements in detail.
2. Regional Investment Corporation (RIC) Drought Loan
The RIC Drought Loan is intended to “help Australian farmers prepare for, manage through, and recover from drought.”
There are four main uses for this loan:
- Preparing for future droughts such as buying and storing reserve fodder.
- Funding drought management activities like carting water
- Funding drought recovery activities including restocking or planting.
- Refinancing eligible existing debt.
Loan Terms
Loan terms include a maximum loan amount of $2 million and a 4.99% variable interest rate that is effective from February 2024 to July 2024.
Learn about the other loan terms, here.
Before You Apply
Before you apply it is recommended that you understand the eligibility criteria and understand the terms of the loan.
You can learn about eligibility requirements here.
You will also need to have a drought management plan and your business cash flow budget as well as financial and identification documents.
Learn more about applying here.
RIC Drought Loan Resources
3. Regional Investment Corporation (RIC) Farm Investment Loans
The intent of this loan is “to help farmers recover from severe business impact and prepare for future financial disruptions.”
This loan can be used for:
- Funding risk management such as diversifying farm production.
- Enhancing productivity like investing in new infrastructure.
- Refinancing existing debt to improve cash flow.
- Pay for operating and capital expenses that build your business.
Loan Terms
Loan terms include a maximum loan amount of $2 million and a 4.99% variable interest rate (effective from February 2024 to July 2024).
Learn about the other loan terms, here.
Eligibility
Eligibility requirements include:
- You must earn or plan to earn at least 50% of your income from the farm business (under normal circumstances)
- The business is in financial need of a loan.
View the full list of eligibility requirements, here.
How To Apply
You are encouraged to apply for the loan online and you can learn more about this process, here.
RIC Farm Investment Loan Resources
4. Regional Investment Corporation (RIC) Agri Starter Loan
According to the RIC, this loan assists first-time farmers and supports farm succession arrangements.
Like the other loans already discussed, there are four main purposes of this loan.
- Funding purchases such as buying land to establish or develop a farm business.
- Funding succession plans including buying out relatives, stamp duty or legal costs.
- Investing in new infrastructure, machinery or productivity enhancements.
- Refinancing existing eligible debt.
Loan Terms & Types
Loan terms include a maximum loan amount of $2 million and a 4.99% variable interest rate that is effective from February 2024 to July 2024.
There are two types of AgriStarter loans. These are first farmer loans and succession loans.
Learn more about the loan terms and types, here.
Eligibility
Learn about eligibility requirements, here.
Application
Learn about the application process, here.
Resources
Access the library of relevant resources, here.
Further Resources & Articles
That’s a wrap on tax write-offs for farm sheds, grants and funding for farmers and low-interest loans. We hope this has been a helpful overview.
Please note that this is not a complete list of all incentives and support available to farmers. This varies between states. Contact your relevant state authority and they will be able to provide advice on the different options available to you.
For more articles like this, browse the Learning Hub – or check out the list below for some further reading.
- Farm Shed Pricing Guide Library
- How To Compare Farm Shed Quotes
- Farm Shed Guide (PDF Download)
- How To Budget For A New Farm Shed
To discuss your farm shed project with one of our building consultants, call us on 1800 687 888 or submit a REQUEST A QUOTE for – we would love to hear from you!
Disclaimer: Information included in this article is general only and does not constitute professional financial advice. Speak with your accountant or financial advisor and the grant or loan provider for advice specific to your situation.
