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Water facilities, fencing and fodder storage assets

Specific primary-production capital allowances for qualifying water facilities, fencing assets and fodder storage assets.

Reviewed 30 July 2026Income years 2025-26 and 2026-27

Who can claim

This deduction is available to individuals and companies.

  • The expenditure is incurred on constructing, manufacturing, installing or acquiring a qualifying asset primarily and principally for a primary production business on Australian land.
  • The asset meets the specific water-facility, fencing-asset or fodder-storage definition.
  • A small business primary producer chooses either the specific primary-production rules or simplified depreciation for each eligible asset and applies that choice consistently.

What you cannot claim

  • Stockyards, pens and portable fences are not fencing assets for this concession.
  • A second-hand commercial water facility or fodder-storage asset is excluded unless you can show no-one deducted or could deduct an earlier construction, manufacture or acquisition amount under the specific rules.
  • Do not claim the same asset under simplified depreciation and the specific primary-production allowance.
  • A partnership does not claim the specific deduction itself; eligible expenditure is allocated to partners under the statutory rules.

How the amount is worked out

Qualifying water facilities and fencing expenditure incurred under the current rules are generally immediately deductible. For fodder storage expenditure incurred on or after 19 August 2018, generally deduct the full eligible cost; expenditure from 7:30 pm ACT time on 12 May 2015 to 18 August 2018 is generally deducted one-third in the year incurred and one-third in each of the next two years, while older expenditure uses effective life. Reduce for non-taxable use and apply the second-hand, partnership, non-arm's-length and recoupment rules.

Records the ATO expects

  • Asset invoice
  • Expenditure and first-use dates
  • Primary-purpose evidence
  • Prior-owner deduction evidence for second-hand assets
  • Partnership allocation
  • Method choice and recoupment records

Where this rule comes from

Primary source: Income Tax Assessment Act 1997 Subdivision 40-F (Sections 40-515 to 40-575). Reviewed 30 July 2026. Covers the 2025-26 and 2026-27 income years.

Supporting sources:

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