From today all new acquisitions by foreign investors of interests in Australian agricultural land must be registered with the Australian Government. Existing foreign investors with interests in Australian agricultural land have until 31 December to register their interests.
As previously reported, the Australian Government announced a package of reforms to enhance compliance by foreign investors with Australia’s foreign investment requirements in May 2015. In support of this, the Australian Government has released an updated edition of the ‘Australia’s Foreign Investment Policy’ document (Policy) which provides guidance on the measures.
Establishment of register of foreign interests in agricultural land
A register has now been established by the Australian Taxation Office (ATO) to record interests in agricultural land held by foreign investors (Register). Importantly, it is expected that information in the Register will be made available to the Australian public in 2016.
Compulsory notification of foreign interests in agricultural land
From today, all acquisitions by foreign investors of interests in Australian agricultural land must be notified to the ATO within 30 days of the acquisition, regardless of value. Foreign investors have until 31 December 2015 to notify the ATO of existing interests they may have.
Registration is different to national interest screening
The obligation to register the acquisition of an interest in agricultural land is distinct from the obligation to notify the Treasurer of a proposed acquisition of an interest in ‘Rural Land’ or vacant ‘Urban Land’ for assessment of whether the acquisition is contrary to the Australian national interest.
The term ‘Agricultural Land’ is defined in the Policy as: ‘land in Australia that is used, or that could be reasonably used, for a primary production business’.
In contrast, the term ‘Rural Land’ is defined in the Policy more narrowly as: ‘land used wholly and exclusively for carrying on a business of primary production. To be a business of primary production, the business must be substantial and have a commercial purpose or character’.
For instance, an acquisition of an interest in vacant land that might be used for agriculture may require registration as ‘Agricultural Land’ but may not fall within the definition of ‘Rural Land’. In this case it is likely to be considered ‘Urban Land’ and may be subject to compulsory national interest screening under the Policy, regardless of value. For completeness, we also set out below the screening thresholds for acquisitions of ‘Rural Land’:
Click here to view table