Duty Savings for Farmers

There are exemptions and concessions for the amount of duty payable on the sale or purchase of farm properties in Victoria.  Read on if you have clients who are farmers …..

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Family Farm structures

A Family Farm Company or a Family Farm Trust allows for the transfer of a farm property, used chiefly for primary production, to be duty free under the following conditions:-
  • the land must be primary production land for land tax purposes;
  • the transferor (seller) can be one or more natural persons, a company or a trust;
  • the transferee (buyer) can be one or more natural persons, a company or a trust;
  • all shares in a Family Farm Company must be owned by related natural persons;
  • all beneficiaries of a Family Farm Trust must be limited to related natural persons.

There are certain provisions to determine if a person is a related natural person.

Young Farmer structures

A Young Farmers Company or a Young Farmers Trust confers a full exemption on the purchase of farmland valued at $600,000 or less, and a concessional rate of duty if the farmland is valued between $600,001 and $750,000.  The following conditions need to be met:-

  • the young farmer must be under 35 years of age when the contract to purchase the farmland is entered into;
  • the acquisition of the farmland must be the first time the young farmer or the spouse of the young farmer have owned farmland property directly or indirectly;
  • the farmland must be used for a primary production business within 5 years of the date of the contract for the farmland
  • the young farmer is normally engaged in a substantially full-time capacity in the business of primary production on the farmland
  • all the shares in the Young Farmers Company must be owned beneficially by the young farmer, or the young farmer and the young farmer’s partner
  • the capital beneficiaries of a Young Farmers Trust must be limited to the young farmer and the young farmer’s partner who must also be under the age of 35 years in order to secure the full benefit.

If you need a company or trust for a farming client, we can provide you with advice and the necessary structure. Call us on 03 9899 9300.