New laws are coming into effect from 1 July 2019 that will insist that all rental properties, including farm housing, have to meet new standards for insulation.
There is a misunderstanding that farm dwellings are excluded from the Residential Tenancies Act when this is not the case. The only difference between farmers and other tenancies is that farm owners have a much shorter termination date of two weeks instead of 90 days.
It is important to note that sharemilkers are the landlord under the new law so they could be the ones who face recourse. We recommend that when drafting up agreements between sharemilkers and owners the agreement needs to state that owners will supply accurate insulation statements for every house provided and that they will ensure they meet all of the required standards of a home.
It’s important all farmers consider these new rules as failure to comply could lead to fines of up to $4,000.
From an income tax perspective, insulating a previously non-insulated house is considered by the Inland Revenue to be capital, and the expenditure cannot be claimed for tax purposes. If, however, the house was previously insulated and the insulation was being replaced, this can be claimed as repairs and maintenance.
Please give us a call if you have any concerns.