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Inland Revenue

Tax Policy

Additions to the list of depreciable land improvements

Clause 423


(35 – PricewaterhouseCoopers, 67 – New Zealand Institute of Chartered Accountants)

Clause 423(2) should be amended to include indoor land improvements. An alternative is that indoor sports grounds with purpose-built surfaces should be depreciated separate from the building under the “building fit-out” asset category.


The provisions will enable taxpayers to claim depreciation deductions for purpose-built surfaces if the surface is a land improvement that previously did not meet the definition of “depreciable land improvement”.

Officials consider that an indoor purpose-built surface will generally form part of a building and buildings that are already depreciable land improvements. With respect to the alternative submission, the Commissioner already has the power to determine whether a type of indoor surface is a separate item of depreciable property (from the building) and can, where appropriate, allow a separate depreciation rate. For these reasons we do not support the submissions.


That the submissions be declined.


(67 – New Zealand Institute of Chartered Accountants)

The term “grounds” should be replaced by “facilities”.


The term “facilities” is a broader term and it may better cater for development of the law in this area.


That the submission be accepted.