On 1 March 2019, the Treasurer released the first report from the Australian Taxation Office (ATO) pursuant to the Register of Foreign Ownership of Water or Agricultural Land Act 2015 (Cth), which requires foreign owners of water access entitlements to register their holdings with the ATO once a year1.
In late 2016, Baker McKenzie published a client alert that explained the purpose of the Water Register, and set out some of the key aspects of the law. That alert is still accessible here.
The ATO's report is based on aggregated data from the Water Register, which includes water entitlements with a level of foreign ownership of 20 per cent or above. The ATO found that registrable foreign entitlements amounted to 10.4 percent of all Australian water entitlements on issue, based data from the Bureau of Meteorology. It also found that the United States of America, China and the United Kingdom are the three largest sources of foreign investment in water entitlements, and that agriculture and mining were the largest uses of those entitlements2.
The publication of this report may serve as a reminder that any foreign owners of water rights must give notice to the ATO within 30 days of the end of a financial year in which the foreign person:
- starts or ceases to hold a registrable water entitlement or contractual water right (where the term of the contract is likely to exceed five years after the person starts to hold the right);
- becomes or ceases to be a foreign person while holding a registrable water entitlement or contractual water right; or
- holds a registrable water entitlement or contractual water right which undergoes a change to the volume of water or the share of a water resource to which it applies.
Please contact us should you require any additional information or advice in relation to the requirements of this Act.
1 Dep. of the Treasury, "Register of Foreign Ownership of Water Report," (Media release, 1 March 2019), http://jaf.ministers.treasury.gov.au/media-release/037-2019/.
2 ATO, "Register of Foreign Ownership of Water Entitlements Report of registrations as at 30 June 2018", https://cdn.tspace.gov.au/uploads/sites/79/2019/02/2018-Register-of-foreign-ownership-Water-entitlements.pdf.