Capital gains tax (CGT)
If you sell all or part of your farmland for a profit, you may be liable for CGT.
Some discounts and concessions apply for individuals, trusts, and small businesses.
If your home is part of the working farm, you may also be eligible for a partial main residence exemption.
See also:
Goods and services tax (GST)
Different rules apply depending on whether you're dealing with farmland or subdivided farmland.
Farmland you sell, or you transfer by assigning a lease with an Australian government agency or by assigning a long-term lease, is GST-free if both of the following apply:
- the land was used for a farming business for at least five years immediately before the sale
- the buyer intends to use it for a farming business.
Subdivided farmland you sell, or transfer by assigning a lease with an Australian government agency or by assigning a long-term lease, is GST-free if all of the following apply:
- the land could potentially be used for residential purposes (but does not contain any residential buildings)
- the land is subdivided from land that has been used as a farming business for at least five years immediately before the sale
- the supply is made to an associate of the supplier (such as a relative or a closely connected company or trust) for less than market value.
Note: A long-term lease means a lease that is for at least 50 years if:
- at the time of the lease or the renewal or extension of the lease, it was reasonable to expect that the lease would continue for at least 50 years
- the terms of the lease or the renewal or extension of the lease, as they apply to the recipient, are substantially the same as those terms under which the supplier held the premises (unless the supplier is an Australian government agency).
See also:
If you own a working farm, find out how capital gains tax (CGT) and goods and services tax (GST) applies.