Farmland register 'hazy'

14 Sep, 2015 05:10 AM
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The part of the new rule that will be most difficult is the meaning of primary production

AUSTRALIAN law firms expect a deluge of foreign investors to register for the new foreign farmland register before the end of the year, in part due to the difficulty of defining agricultural land.

The register, which was established in July this year, requires all foreign persons who hold interests in agricultural land, regardless of its value, to notify the Australian Tax Office.

Those who have already registered with the Foreign Investment Review Board (FIRB) still need to register.

Lawyers say the legal definitions are hazy.

"The part of the new rule that will be most difficult is the meaning of primary production," Baker & McKenzie partner Roy Melick said.

"It is important to distinguish agricultural land from rural land."

The meaning of "agricultural land" for example has been expanded to mean land in Australia that is used, or that could reasonably be used, for a primary production business.

Mr Melick and senior associate Hilary Brownlow said that some foreign investors will just register to be on the safe side regardless of the definition.

"We think there will be a lot of registrations because foreign owners are risk averse," Mr Melick said.

Johnson Winter Slattery partner Carrie Follas said there would most certainly be a wave of registrations to come in and that it will be an administrative nightmare. "Farmland includes multiple titles and lots and the system at the moment is not very well set up to register that information."

She said large forestry holdings which have a major foreign ownership were complex because of the titles and lots and managed investment scheme histories. She said failing to register wasn't worth the risk despite the fact that penalties for failing to register an interest have not yet been finalised.

Earlier this year Treasurer Joe Hockey strengthened the enforcement of new and existing foreign investment rules on residential property and its registration with the FIRB, including up to three years' jail.

AFR
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READER COMMENTS

Percy
15/09/2015 8:45:11 AM

Perhaps we need to define what constitutes a FARM and find another word for "Hobby Farm". Otherwise we need to become RANCHERS to define which is a business then include Ranchland into a register. Selling off the 'farm' (and businesses) reduces our future population to becoming tenants in our own land, send the wealth created offshore and provides less for funds for any Government.
dogsbody
17/09/2015 5:39:32 PM

I bet they tax "farmers" as opposed to miners regardless of the rules. Miners turn farmland upside down, get much more leeway with environment protection laws and freely transfer their profits offshore. Perhaps we need to create a level playing field instead of more red tape after all this government did promise less of it, the incumbent just relieved of his job wasn't exactly known for keeping promises and in collusion with the Nats hasn't exactly made life easier for farmers.

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