The Government has released for consultation draft rules to support the Register of Foreign Ownership of Water or Agricultural Land Act 2015 (the Act) and a draft Water Registration Form which outlines the proposed data fields for water registration.
As part of the foreign investment framework reform package, the Government agreed to introduce legislation to establish a Water Register before 1 December 2016.
Following consultation, the 2016-17 Budget provided that the Government would implement the Water Register by requiring foreign persons to notify and update their interests in water entitlements with the Australian Taxation Office (ATO).
The legislation to give effect to the Water Register passed Parliament on 1 December 2016.
Water entitlements will not need to be registered before 1 July 2017.
The Act provides that Rules may exempt kinds of water rights from the definition of ‘registrable water entitlement’ or that certain foreign persons do not need to register.
Broadly, the draft rules propose that the following exemptions will apply to the requirement to register with the ATO:
- It is proposed that ‘harvestable rights’ will be exempt from the definition of ‘registrable water entitlement’. The term ‘harvestable right’ takes a different meaning in different jurisdictions but for the purposes of the Water Register it will be a right which allows water harvested from rainfall to be used for stock and domestic purposes.
- It is proposed that irrigation infrastructure operators will not need to register the water they hold for the purposes of meeting their requirements under an irrigation right with a customer, or conveyance water, which is the additional water which may be lost in transit or as a result of seepage or evaporation.
- It is also proposed that foreign persons will not need to register registrable water entitlements or contractual water rights which are obtained through the enforcement of a security held for the purposes of a money lending agreement.