The Register of Foreign Ownership of Agricultural Land Amendment (Water) Bill 2016 (Bill) seeks to amend the Register of Foreign Ownership of Agricultural Land Act 2015 (Act) to provide for the creation and maintenance of a new register relating to foreign ownership of water entitlements.
Foreign Persons that hold, or will hold, a ‘Registrable Water Entitlement’ or ‘Contractual Water Right’ on 1 December 2017 will need to notify the ATO. Those interests will be noted on the Register of Foreign Ownership of Water Entitlements (Water Register). Further, from 1 December 2017, certain events will trigger additional notification obligations.
We have prepared an information sheet which outlines when notification obligations for Foreign Persons arise under the Bill - refer to the link below.
The Bill has gone through a public consultation phase and may be subject to change. Whilst the Bill is yet to be enacted, and the rules referred to in the Bill are yet to be prepared, the information sheet should assist you in identifying when you, or someone you act as an agent for, will be likely to have an obligation to notify the ATO.
The Water Register is in addition to the Register of Foreign Ownership of Agricultural Land (Agricultural Land Register) already maintained by the ATO. The need for a separate Water Register has arisen as a result of the unbundling of water rights across Australia and because of the need to understand foreign investment in water held for purposes other than for use in conjunction with agricultural land. It aims to deliver better scrutiny and transparency around foreign investment, consistent with new foreign investment laws. Once established, the information obtained by the Water Register will be used to better identify trends in foreign investment and for the subsequent review of the treatment of water rights under the foreign investment review framework.
It is understood that the obligation on Foreign Persons to notify the ATO of an interest in agricultural land will remain unchanged. You should be aware that if you hold an interest in agricultural land, as well as an interest in water, those respective interests may need to be noted on both the Water Register and the Agricultural Land Register. Foreign ownership notifications continue to apply to agricultural land as well.
Further, the Water Register is in addition to, and separate from, the water registers maintained by the relevant State and Territory authorities for water licensing purposes. Whilst gathering foreign ownership information will assist in informing water and foreign policy going forward, it brings back to the surface the good old debate about the need for an efficient and nationally-consistent approach to the management of water markets across Australia – including for the collection of data relating to water rights.
If you have any questions regarding how the Bill or the Act may affect you, please feel free to get in touch.