Water resources are critical to any farming enterprise and never more so than during drought years that we see regularly in Australia. While rain may have been overly plentiful in many places recently, it is still important to ensure that in any rural transaction that the water rights are considered.

Water resources are managed in Queensland under the Water Act 2000 ("the Act") which regulates water rights and entitlements. The Act provides for each region of Queensland and there are Resource Operation Plans that set out the rules for water dealings in particular areas.

Water rights include:

  1. water licence: permits the use of water on a particular parcel of land including from a spring, watercourse, overland flow or underground water. A licence cannot be sold separately, as it attaches to the land and transfers with the land. In some areas, a bore can be used for stock and domestic use without a licence, but other areas require a licence for such use. If you are buying a property then you need to obtain a water data entitlement search to determine if there are any water licences which go with the land (and you should not assume such rights exist without undertaking the search);
  2. water allocation: an authority to take water and an entitlement to a share of the resource in the catchment. It is not attached to land and has a separate certificate of title, so it can be sold separately to land. The ownership of a water allocation is entered into the Water Allocations Register. A water allocation can be leased, subdivided or mortgaged; and
  3. riparian rights: you can use water for domestic and stock purposes if your land adjoins a water course (creek or river).

Water allocation entitlements can fall within two categories:

  1. supplemented: where the water is obtained from a storage infrastructure (dams and weirs) and the delivery system is managed by a licensed operator (such as Sunwater); or
  2. unsupplemented: where the water is obtained from groundwater or from overland flow in creeks/rivers and is managed by the Department of Resources.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.