myIR, payments and more
Determinations: Depreciation determinations
The Commissioner has been asked to review the estimated useful life and depreciation rate applicable to specialised buildings and plant used to grow mushrooms on a commercial basis. These assets consist of composting buildings (that may include bunkers that are contained within the building); phase 2 pasteurisation buildings (that may include separate mushroom spawning tunnels that are contained within the building), and growing buildings (that may include separate mushroom growing tunnels that are contained within the building), and are constructed predominantly of structural insulated panels ("SIP"). Non-SIP areas are usually constructed with concrete walls and floors, cement panel and colour steel or similar material.
The Commissioner accepts that these specialised, mushroom growing buildings and plant are exposed to a wet, humid and corrosive environment due to the material that is used in growing mushrooms and the environment that mushrooms need to grow successfully.
For these reasons the Commissioner is satisfied that the estimated useful life ("EUL") of these specialised buildings and plant (mushroom spawning tunnels and mushroom growing tunnels, when in books separately from building cost) is 33.3 years and has set a provisional depreciation rate for these assets accordingly. It needs to be noted that Bunkers (concrete) are already included in the Building and structures asset category, with a EUL of 20 years, and may be used by owners of bunkers used in mushroom growing.
Whether bunkers, spawning and growing tunnels are items of plant that are merely contained within a building or part of the building itself will be a question of fact. In deciding how these items should be categorised it is necessary to consider the degree of affixation and integration these items have with the building.
It also needs to be noted that these rates of depreciation do not apply to those buildings that are not directly involved in the mushroom growing process. These buildings (such as staff facilities, workshops and office areas) are not directly affected by the harsh conditions experienced in the specialised buildings and the estimated useful life will remain at 50 years.
Similarly, buildings with an estimated useful life of 50 years that are converted from some other use to mushroom growing cannot be subject to this determination. This change in use may have enabled the owner to apply for a special depreciation determination, on the basis that the change of use of the building has affected the buildings estimated useful life. However, with effect from the 2011/12 income year section EE 35(2) of the Income Tax Act 2007 states that the Commissioner is not able to set a special rate of depreciation for buildings. However, if the owner places the specialised plant subject to this determination (bunkers, spawning and growing tunnels) inside an existing building envelope, these items of plant may be depreciated using these new rates.
Determination PROV24: Tax Depreciation Rates Provisional Determination Number PROV24
This determination may be cited as "Determination PROV24: Tax Depreciation Rates Provisional Determination Number PROV24".
This determination applies to taxpayers who own items of depreciable property of the kind listed in the tables below.
This determination applies for the 2012 and subsequent income years.
Pursuant to section 91AAG of the Tax Administration Act 1994 I set in this determination the provisional rates to apply to the kinds of items of depreciable property listed in the tables below by:
- Adding into the "Building and Structures" asset category, the provisional asset class, estimated useful life, and diminishing value and straight-line depreciation rate listed below:
|"Building and Structures" asset category||
Estimated useful life
|Mushroom Factory (purpose built, predominantly in prefabricated stressed skin insulation panels), acquired before 19 May 2005||
|Mushroom Factories (purpose built, predominantly in prefabricated stressed skin insulation panels), acquired on or after 19 May 2005||
- Adding into the "Agriculture, horticulture and aquaculture" industry category, the provisional asset class, estimated useful life, and diminishing value and straight-line depreciation rate listed below:
|"Agriculture, horticulture and aquaculture" industry category||
Estimated useful life
|Mushroom growing tunnels (when in books separately from building cost)||
|Mushroom spawning tunnels (when in books separately from building cost)||
In this determination, unless the context otherwise requires, words and terms have the same meaning as in the Income Tax Act 2007 and the Tax Administration Act 1994.
This determination is signed by me on the 1st day of October 2012.
LTS Manager, Technical Standards
Other pages in: Depreciation determinations
- General Determination DEP103: Depreciation Rate for skin therapy machines used for beauty treatments
- General Determination DEP102: Depreciation Rate for potato cool stores (climate controlled) structure only, excluding climate control plant
- General Determination DEP101: Tax Depreciation Rate for abrasive blasting booths (including media recovery/recycling, dust extraction and ventilation systems)
- General Determination DEP100: Depreciation rate for rapid DC car charging stations
- General Determination DEP99: Campervans and Motorhomes
- General Determination DEP98: Kiwifruit overhead mesh shelters
- Provisional Determination PROV27: Geothermal and thermal powerhouses
- General Determination DEP96: Depreciation Rate for specialised oil and gas industry equipment
- General Determination DEP95: Depreciation Rate for rail passenger service electric multiple units
- General Determination DEP94: Depreciation Rate for carports (freestanding or lean-to)
- General Determination DEP93: Depreciation Rate for portable fencing (galvanised steel)
- Provisional Determination PROV26: Depreciation Rate for hydroelectric powerhouses
- General Determination DEP92: Depreciation Rate for wool/shearing sheds
- General Determination DEP91: Depreciation Rate for gas detectors (hand-held) and gas detectors (fixed)
- General Determination DEP90: Depreciation Rate for drones and integrated accessories including remote controllers and software, used for photography, surveillance and video/movie production
- Determination DEP 89: Bench-top Pizza Ovens and Microwave Ovens (Commercial)
- Determination DEP88: Depreciation rate for pet grooming and cleaning equipment
- Determination DEP87: Depreciation rate for tablet computers and electronic media storage devices (including smartphones and MP3 players and similar devices)
- Amendment to Provisional Depreciation Determination PROV 25: Stabilised Turf Systems
- Determination DEP 83: Depreciation Rates for machinery used for grading, sorting and packing produce
- Determination DEP 85: Buildings with reinforced concrete framing (default class), Buildings with steel or steel and timber framing (default class), Buildings with timber framing (default class)
- Provisional Depreciation Determination PROV 25: Stabilised Turf Systems
- Determination DEP 84: Depreciation Rate for printing machines (automated inkjet flatbed)
- Determination DEP 82: General depreciation rate for meal feeder - automated
- Determination PROV 23: Provisional depreciation rate for automated milking system
- Determination PROV 22: Provisional depreciation rate for Dairy Plant Dry Store Buildings
- Determination DEP 81: Fertiliser storage facilities and remedial matters relating to the depreciation of buildings and grandparented structures
- General Depreciation Determination DEP 80: Residential Rental Property Chattels
- Determination DEP 79: Remedial matters relating to the depreciation of buildings Depreciation Determination Number 79
- Determination DEP 78: Tax Depreciation Rates General Determination Number 78
- Determination PROV21: Tax Depreciation Rates Provisional Determination PROV21
- Determination DEP77: Motor vehicles rented for short-term periods of 1 month or less Depreciation Determination Number 77
- Determination DEP76: Tax Depreciation Rates General Determination Number 76
- Determination DEP75: Tax Depreciation Rates General Determination Number 75
- Determination PROV20: Tax Depreciation Rates Provisional Determination Number PROV20
- Determination DEP 73: Tax Depreciation Rates General Determination Number 73
- Determination DEP74: Tax Depreciation Rates General Determination Number 74
- Determination PROV19: Tax Depreciation Rates Provisional Determination PROV19
- Determination DEP 72: Tax Depreciation Rates General Determination Number 72
- Determination DEP 71: Tax Depreciation Rates General Determination Number 71
- Expense items in the Table of Depreciation Rates
- The Commissioner's Table of Depreciation Rates
- General Depreciation Determination DEP70
- General Depreciation Determination DEP69
- General Depreciation Determination DEP68
- Determination DEP66: Tax Depreciation Rates General Determination Number 66
- Tax Depreciation Rates General Determination Number 67
- Determination Prov18: Tax depreciation rates provisional determination number 18
- Tax Depreciation Rates General Determination Number 65
- Tax Depreciation Rates General Determination Number 64
- Draft general depreciation determination - exposure draft DDG0112
- Tax Depreciation Rates General Determination Number 63
- Buildings and structures DEP62
- Child restraints (capsules and car seats) for hire DEP61
- Determination Prov17: Tax depreciation rates provisional determination number 17
- Tax Depreciation Rates General Depreciation Determination DEP60
- Provisional Depreciation Determination PROV16
- Provisional Depreciation Determination PROV15
- Provisional Depreciation Determination PROV14
- Provisional Depreciation Determination PROV13
- General depreciation determinations DEP55 to DEP59
- General Depreciation Determination DEP54