New laws that have recently been passed through Parliament will see stamp duty exemptions extended on the transfer of primary production land to a company or other entity directed by a family.
NSW Deputy Premier and Minister for Regional NSW Paul Toole has welcomed the move saying that he believes it will help futureproof farms for generations to come.
“Farmers are the backbone of bush communities and the State’s economy, and they have worked tirelessly to keep our supermarket shelves stocked despite every possible challenge thrown at them over the past few years. NSW is home to a diverse range of primary industries, and this move makes it easier for the next generation to follow in their families’ footsteps, whether it be in beef, dairy, poultry, wool or cropping operations,” says NSW Deputy Premier and Minister for Regional NSW Paul Toole.
“As of 1 July 2021, there were almost 240,000 rural properties in NSW worth an estimated $203 billion these new laws will help ensure the farming sector continues to go from strength to strength,” Mr. Toole.
Echoing the opinions of Mr. Toole, the Minister for Finance Damien Tudehope believes that the removal of stamp duty for family-owned companies, trusts or entities would cut costs and will play a huge role in benefiting and supporting the next generation of NSW farmers.
“We want to support more family businesses in our regions to continue being the thriving heart of country communities. Under the current stamp duty legislation, if someone wanted to pass their farm on to a child’s trust or company to operate, there would be stamp duty charged on that transfer. “This simply doesn’t make sense with the way family businesses operate. This is a fairer proposal, which will modernise family farming business practices,” says NSW Minister for Finance Damien Tudehope.
”Under existing legislation, only a member of the family is exempt from duty tax when buying the land. The State Revenue and Fines Legislation Amendment (Miscellaneous) Bill 2022extends this exemption to family farms that are structured using a trust or company in addition to those owned by individuals,” continued Mr. Tudehope.
Damien Tudehope says that the transferee would need to maintain control of the entity for a period of at least three years after purchase to ensure the integrity of the exemption.
“This change supports families and farmers. It also reduces the cost of working on farms in NSW by alleviating stress in both the sale and purchase of land,” says Damien Tudehope.
Minister for Agriculture and Western NSW Dugald Saunders said this is another step forward in encouraging younger generations into farming.
“The farming industry has been through a lot in the last few years; drought, bushfires, a global pandemic, a mouse plague and of course floods, so this will be a welcome announcement for food and fibre producers,” says Minister for Agriculture and Western NSW Dugald Saunders.
There are estimated to be about 150,000 primary production properties located in NSW that might be eligible for this proposed exemption.
“There are some fantastic up-and-comers in agriculture who are excited to officially take over their family farms, however stamp duty can definitely be a deterrent and a disincentive to stay in the regions. Agriculture plays a huge role in NSW’s economy with the industry currently valued at around $21 billion –so initiatives like these which encourage more people into the sector will only grow that contribution and, at the same time, encourage fresh ideas and new practices in farming,” says Dugald Saunders.
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