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27 Sep 2017

Depreciation Rate for potato cool stores (climate controlled) structure only, excluding climate control plant

Depreciation determination DEP102 (2017) adds an asset class for 'potato cool stores (climate controlled) structure only, excluding climate control plant'.

Note to Determination DEP102

The Commissioner has recently been asked to consider what depreciation rate should apply for potato cool stores.

Potato cool stores are specialist buildings that control humidity and temperature so that potatoes can be stored for long periods without spoilage occurring. These cool stores are fitted with refrigeration reticulation machinery, air transfer systems and associated electronic componentry (climate control plant).

In appearance, potato cool stores are dome-shaped tunnels. They are usually constructed of zinc coated galvanised steel (corrugated iron). The Commissioner accepts that these specialised buildings are exposed to a humid, corrosive environment that impacts the life of the building’s construction material.

For this reason the Commissioner is satisfied that the estimated useful life (EUL) of these specialised buildings is 33.3 years and has set a provisional depreciation rate for these assets accordingly.

It should be noted that it is the Commissioner’s view that the climate control plant is not attached to the potato cool store building; it can be easily removed without damaging either the plant or the building. This being so, the various items of climate control plant are separate items of depreciable property and (where appropriate) may be able to be separately depreciated. Further information, regarding whether items of depreciable property form part of a building, may be found in Interpretation Statement IS 10/01 Residential Rental Properties – Depreciation of Items of Depreciable Property [1].

General Determination DEP102: Tax Depreciation Rates General Determination Number DEP102

This determination may be cited as "Determination DEP 102 Tax Depreciation Rates General Determination Number DEP102: Potato cool stores (climate controlled) structure only, excluding climate control plant".

1. Application

This determination applies to taxpayers who own items of depreciable property of the kind listed in the tables below:

This determination applies for the 2017/18 and subsequent income years.

2. Determination

Pursuant to section 91AAF of the Tax Administration Act 1994 I set in this determination the rate to apply to the kind of items of depreciable property listed in the table below by:

  • Adding into the "Buildings and Structures" asset category, the new asset class, estimated useful life, and general diminishing value and straight-line depreciation rates listed below:
Asset class Estimated useful life
DV rate (%) SL rate (%)
Potato cool stores (climate controlled) structure only, excluding climate control plant 33.3 4.5 3

3. Interpretation

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 27th day of September 2017.

Rob Wells
LTS Manager, Technical Standards

1Further information on this statement may be found at (search term "10/01").