Who Pays?

Is it a farm expense or is it a personal expense?

When there’s only one family living on the farm whether it is a personal or farming expense is not usually an issue. It may be discussed and allocated appropriately at year end with the accountant.

However, when more than one family lives on the farm or in houses owned by the farming operation, the perception of what is a personal expense or a farm expense may be different for each family.

A couple of factors complicate the housing issue:

  • The respective ages of the houses
  • The family’s perception of the house being in good repair

Generally, cosmetic or general maintenance of the house would be considered a personal expense whereas structural repairs would generally be considered a farm expense.

The grey areas in all of this are when structural repairs are needed but the structural changes desired by the family would cost significantly more than the basic repairs would and when structural changes are made for personal use and enjoyment (eg: a swimming pool). In these situations careful consideration should be given to the allocation of costs.

Again, communication is key.

It is important that families living on the farm or farm properties, as a group, establish basic parameters for the allocation of housing expenditures. That way the need to discuss housing expenditures will hopefully be limited to those of significance and which, in turn, may reduce the potential for conflict.

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