The federal government has announced the screening threshold for the sale of farm land to foreign investors will be reduced from $252 million to $15 million from this month.
This would mean that sales such as Cubbie Station - Australia's biggest cotton farm and irrigator - to a Chinese consortium for $240 million in January, 2013, may undergo extra scrutiny in the future.
Chinese buyers reportedly spent $150 million on Queensland property over the last year, ranking third behind Korea and Singapore.
The Foreign Investment Review Board will scrutinize all sales over $15 million and the threshold will apply to the cumulative value of land already owned by the investor.
The government also stated they will establish a register of foreign owned agricultural land to strengthen requirements and provide a clear picture of foreign investment in Australia's agricultural sector.
From July 1 of this year the Australian Tax Office will begin collecting information on all new foreign investment in agricultural land and will complete a stocktake of existing overseas-owned land.
These changes may impact the equity position of many rural enterprises if the buyers from these regions exit the market. This in turn could impact the business and succession plans of many family owned Agribusiness operations. Please contact Hanrick Curran’s Agribusiness specialists John Kotzur or Kim Hanrick for assistance.
Thanks to Meredith Clisby for contribution to content.