The Register of Foreign Agricultural Land Amendment (Water) Bill 2016 (Cth) (Bill) was introduced to Parliament on 12 October 2016 and aims to allow for increased transparency on the levels of foreign ownership in water entitlements.
It will do so by amending the Register of Foreign Ownership of Agricultural Land Act 2015 (the Act) to establish a Register of Foreign Ownership of Water Entitlements (Water Register).
The existing Agricultural Land Register commenced on 1 July 2015 and requires all foreign investors who hold interests in agricultural land to register those interests with the Australian Taxation Office regardless of the value of that land.
The Bill will increase the scope of the Act by requiring ‘Foreign Persons’ (given the same definition as in the Foreign Acquisitions and Takeovers Act 1975 (Cth)) that hold, or will hold, a ‘Registrable Water Entitlement’ or ‘Contractual Water Right’ as of 1 December 2017, to notify the ATO within 30 days after the end of the financial year of any notifiable events that occurred during the financial year.
Under the Bill, the following terms are proposed to be defined as follows:
‘Registrable Water Entitlement’:
- an irrigation right (within the meaning of the Water Act 2007) that relates to a water resource in Australia;
- a right (including an Australian water access entitlement) conferred by or under a law of a State or Territory to do either or both of the following:
- to hold water from a water resource in Australia; or
- to take water from a water resource in Australia.
However, a registrable water entitlement does not include:
- stock and domestic rights; or
- riparian rights; or
- water allocations; or
- a right of a kind specified in the rules.
‘Contractual Water Rights’:
A contractual water right of a person means a contractual right that the person holds (alone or jointly) to all or part of another person’s:
- registrable water entitlement; or
- water allocation; or
- right of a kind specified in the rules.
As the Bill has not yet been enacted (as of 1 December 2016 it was before the House of Representatives for consideration of amendments proposed by the Senate) the final form of the legislation is unknown.
Page Seager will be monitoring the progress of the Bill and will provide a further update once it is enacted. In the meantime, if you are a foreign person or are proposing to enter into a transaction with a foreign person involving relevant water rights, you should be aware of the proposed Water Register and factor in registration requirements.
If you have any queries or would like further information regarding this article, please contact:
M: 0427 183 217
T: (03) 6235 5915
Published: 13 December 2016