AUSTRALIA: Government assents to Register of Foreign Ownership of Agricultural Land Amendment (Water) Act 2016

Thursday December 15 2016

On 07 December 2016, the Government of Australia assented to amendments to the Register of Foreign Ownership of Agricultural Land Act 2015, to establish a register of foreign ownership of water access entitlements. This builds upon previous amendments to the Foreign Acquisitions and Takeovers Act 1975, which established registration requirements for foreign owners of land and water rights in Australia.

From 1 December 2017, foreign persons will be required to register their holdings of registrable water entitlements and contractual water rights with the Australian Taxation Office (ATO) once each year.

From 1 July 2017 until 30 November 2017 there will be a stocktake period in which foreign persons will be able to register pre-existing interests, providing a baseline against which changing levels of ownership can be assessed.

Those entering into transactions with foreign persons that involve registrable water entitlements or contractual water rights additionally need to consider the registration requirements.

Foreign Persons

A foreign person for the purpose of reporting is considered to be:

• an individual that is not ordinarily resident in Australia;
• a foreign government or foreign government investor;
• a corporation, trustee of a trust or general partner of a limited partnership where an individual not ordinarily resident in Australia, foreign corporation or foreign government holds a substantial interest of at least 20%; or
• a corporation, trustee of a trust or general partner of a limited partnership in which two or more foreign persons hold an aggregate substantial interest of at least 40%.

Registerable Water Entitlement

A registrable water entitlement is:

• a right to receive water from an irrigation infrastructure operator; and
• a right conferred by or under a law of a State or Territory to:
  (i) hold water from a water resource in Australia; and/or
  (ii) take water from a water resource in Australia (e.g. a water access licence or entitlement).

The entitlement does not include; (i) stock, domestic and riparian rights; (ii) certain water access or delivery rights; or (iii) water allocations.

Contractual Water Right

A contractual water right for the purpose of reporting is consider to be: 

• A right under a contract or deed that the foreign person either alone or jointly holds to another person`s registrable water entitlement under a contract with a remaining term (including any extension or renewal) that is reasonably likely to exceed 5 years at the end of 30 November 2017.

Registration Procedure

Between 1 July 2017 – 30 November 2017 foreign persons must:

• notify the ATO of all registrable water entitlements the foreign person will hold at the end of 30 November 2017;
• notify the ATO of all contractual water rights the foreign person will hold at the end of 30 November 2017.

From 1 December 2017, foreign persons must, give notice to the ATO within 30 days of the end of a financial year in which the foreign person:

• starts or ceases to hold a registrable water entitlement or contractual water right;
• becomes or ceases to be a foreign person while holding a registrable water entitlement or contractual water right; or
• holds a registrable water entitlement or contractual water right which undergoes a change to the volume of water or the share of a water resource to which it applies.

For more information, please click the link at the top of the page.