Foreign ownership of water
The beginning of a new financial year means the time for foreign persons (including foreign owned companies and trusts) to notify the Australian Taxation Office (ATO) by 30 July of any acquisitions of registerable water interests during the previous financial year (and continues to hold at 30 June).
Whilst foreign holders of water interest are likely aware of their historical 30 July notification obligations required under the previously in force Register of Foreign Ownership of Water or Agricultural Land Act 2015 (Cth), recent changes to the Foreign Acquisitions and Takeovers Act 1975 (Cth) have introduced broader reporting obligations which mean that the water registration requirements have somewhat changed.
Unlike other interests in Australian land, companies or businesses which are required to be registered within 30 days of the acquisition, interests in water require registration within 30 days of the end of the financial year (being 30 July) where:
- a foreign person acquires a registerable water interest during the financial year and holds the interest at the last day of the financial year (30 June);
- a person becomes a foreign person whilst holding a registerable water interest; or
- there is a change in characteristics of a registerable water interest held by a foreign person.
Importantly, in circumstances where a foreign person ceases to hold the registerable water interest at the end of the financial year, no notice is required. To assist in understanding these changes, we set out certain practical examples below:
| No. | Example | Outcome |
| 1 | A foreign person acquires a registrable water interest between 1 July 2023 and 30 June 2024, and at 30 June 2024, the person remains a foreign person and continues holding the registrable water interest. | Registration required by 30 July 2024. |
| 2 | A non-foreign person holds a registrable water interest and becomes a foreign person on before 30 June 2024. At 30 June 2024, the person remains a foreign person and continues holding the registrable water interest. | Registration required by 30 July 2024. |
| 4 | A foreign person acquires a registrable water interest between 1 July 2023 and 30 June 2024 but disposes of that interest prior to 30 June 2024. | No registration required. |
Registerable Water Interests
A water interest will be registerable where it is either a:
- registerable water entitlement; or
- a contractual water right of a person under a contract or deed whose term (after the person starts to hold the right) is reasonably likely to exceed 5 years.
Notably, a registerable water entitlement is either an irrigation right that relates to water resources in Australia or rights conferred by law to either hold water from a water resource in Australia or take water from a water resource in Australia. Water entitlements do not include riparian rights or other stock and domestic rights.
Consequences for non-compliance
Foreign persons who fail to register their water interests with the ATO by way of the Register may face civil penalties and infringement notices in relation to alleged contraventions. Additionally, a failure to promptly register may result in FIRB looking unfavourably on applicants in future FIRB approval applications.
How can we assist?
Although registration is simple, identifying which interests require registrations can be complex due to the legislation, regulations and rules providing a number of exclusions. Our FIRB team can assist you in identifying any registrable water (or other) interests and managing your ongoing compliance requirements.