Who can claim
This deduction is available to individuals and companies.
- For electricity, you have an interest in the land or are a share-farmer carrying on a business there, and you or another entity intends to use the supplied electricity in a taxable-purpose business on that land while the interest or share-farming condition continues.
- For a telephone line, a primary production business is carried on the land and you have an interest in the land or are a share-farmer carrying on that primary production business.
What you cannot claim
- Private household use and expenditure recognised as the cost of another asset are excluded or apportioned.
- The deduction is not available to a partnership itself; eligible partnership expenditure is allocated to partners under the specific rules.
- Do not also claim the expenditure as decline in value, an immediate asset deduction or under another provision.
How the amount is worked out
Deduct 10% of qualifying electricity-connection or telephone-line expenditure in the year incurred and 10% in each of the next nine income years. Apply private or non-taxable-use limits, cap a non-arm's-length amount at market value, allocate partnership expenditure to partners and include deductible recoupments as required.
Records the ATO expects
- Connection agreement
- Invoices
- Land-use and business evidence
- Ownership, lease or share-farming records
- Partnership allocation
- Non-arm's-length valuation and recoupment records
Where this rule comes from
Primary source: Income Tax Assessment Act 1997 section 40-645 (Section 40-645). Reviewed 30 July 2026. Covers the 2025-26 and 2026-27 income years.
Supporting sources:
- ATO Guide to depreciating assets 2025 (Guide to depreciating assets 2025)