Introduction
On 11 February 2015, the Australian government announced that it would be changing the threshold for notifications of agricultural land purchases by foreign investors from $252 million to $15 million from 1 March 2015.
Existing investments included in the threshold
The new $15 million threshold is a cumulative threshold – it applies to a foreign investor's aggregate holdings in agricultural land in Australia. This means that a small proposed purchase of agricultural land by a foreign investor (which could be well below the $15 million mark) could trigger a FIRB notification requirement if that investor already holds a sizeable interest in Australian agricultural land.
A new foreign ownership register
As part of the increased focus on acquisitions of agricultural land, the Australian government is proposing to set up a foreign ownership register of agricultural land. From 1 July 2015, the Australian Taxation Office will start collecting information on all new foreign investment in agricultural land, even investments that fall below the notification threshold. The Australian Taxation Office will also conduct a stocktake of existing agricultural land held by foreign interests.
Impact of the changes
At this stage, the impact of the changes is unclear. The changes seem to be aimed at increasing the oversight of foreign investment in Australian agribusinesses rather than blocking investment, although it is not clear whether the lower notification threshold may signal potential changes in the government's stance on agribusiness investment by foreign investors.
