Rural

Rural land is land that is used wholly and exclusively for carrying on a substantial business of primary production. The definition of primary production is taken from the Income Tax Assessment Act 1997 and refers to production resulting directly from the cultivation of land; animal husbandry/farming; horticulture; fishing; forestry; viticulture or dairy farming. Primary production for the purpose of the rural land definition does not include vacant land (even if zoned ‘rural’), hobby farms, ‘rural residential’ blocks or land used for stock agistment or mining.

To constitute a business of primary production, it must be substantial and have a commercial purpose or character and not merely be carried on as a hobby or for recreation purposes. A number of factors are considered in determining a business’ commercial purpose or character, including:

• operating as a significant commercial activity, and not a recreation or hobby;
• the intention of the business is to make a profit from the activity;
• repetition and regularity of activity;
• activity organised and carried on in a businesslike manner with associated business records and reports;
• reasonably large scale operation; and
• commercial scale of sales of product.

A primary production business should also meet the following criteria:

• the value of the business’ Australian urban land should be less than 50 per cent of its total assets; and
• the land on which the business is being conducted should be zoned rural and not residential.

Rural land is not subject to notification under section 26A of the FATA.  However, the acquisition of an interest in rural land and/or a primary production business is subject to the same monetary thresholds that apply to other acquisitions of Australian companies or business assets.

For examples of businesses that do/do not fall into the primary production category, see the Australian Taxation Offices ruling on "Am I carrying on a business of primary production?"

Who is exempt?

Refer to Exemptions for acquisitions which do not require notification and approval.

How to Apply

For information on how to apply (including application forms), please see How to Apply.