Australian agriculture has gained popularity globally because of its variety and volume of production, despite being an arid land characterised by extreme climatic conditions. The country is not just known for its picturesque landscape but also for its efficiency in meeting food demand at a global level. However, growing food demand and the declining agricultural trade conditions in Australia and across the globe have increased the need for innovation in the agricultural sector significantly. Over the years, several innovations have been made through land management practices which in turn enhanced the potential of agriculture to minimise soil threats, and minimise threats to water resources, and biodiversity.
Owning farmland in Australia is not as easy and involves acquiring visas and investment approvals. In this blog, we have discussed how to buy farmland in Australia. But, before that, let us discuss
Factors to be considered while Purchasing Agricultural Land in Australia
- Ownership of Farmland: Australian farms are primarily owned by individual farmers and are family-run institutions or private propriety limited firms. For attaining the best land ownership structure for a new business, you need to seek proper advice related to tax and accounting.
- Land Tenure: Freehold and leasehold are the two common concepts of land tenure in Australia. Every Australian state and territory has respective applicable laws for that state or territory and they manage the creation and ownership of those land titles. Most Australian farmland is purchased freehold by an individual farmer and is leased from the government or the Crown. Another system that is prevalent in all states and territories of Australia is The Torrens Title System for Land Title Creation and Registration which creates and manages the interests of freehold and private leasehold lands.
- Native Title: As the name suggests, the native title identifies the rights and interests of native Australians and Torres Strait Islanders in land and water matters in Australia. It allows the natives of the land to stick to their traditional customs and rules. The native title should mandatorily be considered while considering purchasing land as agricultural property.
- Share Farming: This is a license to consider using the agricultural land by sharing farming agreements, adjustment agreements, private leases or acquisition arrangements, etc. Since there are several farming or private lease agreements which are verbal but have regular tenancy, these agreements need to be made in writing to ensure a just agreement between parties. Agricultural tenants usually include a written license or lease, a tenancy at will, a share farming agreement, and other such arrangements that protect the ownership of the farm.
How to Buy Farmland in Australia?
As a foreigner, if you are planning on purchasing Australian farmland, you need to
- Apply for approval before investing
- Register on the Agricultural Land Register
Note: “As a part of foreign investment reforms, a new Register of Foreign Ownership of Australian Assets will be introduced on 1 July 2023.” This service will allow you to manage investment obligations such as applying for residential approval, asset registering, updating personal details, and lodging a vacancy fee return.
Before investing in agricultural land in Australia, make sure you apply to the Foreign Investment Review Board (FIRB). Your approval would depend on
- your investment value
- if you are an investor from the trade agreement partners
- if you are a foreign government investor
- if you have a close connection to Australia
To apply for investing in agricultural land in Australia, visit the FIRB Application Portal and register your interests on the Agricultural Land Register for which you need to fill out the Land and Water Registration Form unless any exemption applies.
Before registering, ensure that you
- are the owner
- have the right to own agricultural land under a lease or licence that has a remaining term that is likely to exceed 5 years
- have the right to own the agricultural land under lease or licence post 1 July 2015 and would exceed 5 years
- you are a foreigner and own land that can be turned into agricultural land while owning it
Since there are several foreigners who have a legal interest in owning agricultural land, registration is a must, regardless of the value or acquisition date. A foreigner or their agent should register their agricultural land interest within a month (30 days).
To register, you need to fill the Land and Water Registration Form with information including entity details, FIRB approval number, land location, size, usage details, land title information, land value, and other such data.
Through this form, you can register up to 20 properties if it is for the same registration reason. But, for registering for more than 20 properties or one property with more than 20 titles, you need to fill in a new registration form with title information or remaining properties. Make sure you enter the same contact and owner details before additional forms are filled.
You need to update your existing registration if
- you aren’t a foreigner anymore
- you do not own agricultural land anymore
- the land you own becomes agricultural land while you own it, or
- the land stops being agricultural land while you own it
In case you fail to adhere to your obligations to register or update your details, you might have to face penalties under the Taxation Administration Act 1953.
If you are looking for a detailed insight into agribusiness in Australia, browse the KG2 website, Australia’s largest independent farmer database. Covering over 95% of Australian farms, we keep our clients connected with producers from the right industry sectors and regions. For a more personalised walk-through, contact us!