How transfer duty applies to farm-in agreements
Learn about the transfer (stamp) duty concessions for eligible farm-in agreements and how they apply to agreements.
Transfer duty concessions apply to certain types of eligible farm-in agreements, where one party (the farmee) spends a stated amount for exploration and development of land subject to an exploration authority held by another party (the farmor) in return for an interest in the authority.
To be eligible for the concessions, you must have either a deferred farm-in agreement or an upfront farm-in agreement. Agreements that have elements of both deferred and upfront farm-in agreements are not eligible for the concessions.
If the only consideration for your farm-in agreement is an exploration amount (the amount spent on exploration activities), transfer duty will not apply to your agreement.
Transfer duty will apply to any other consideration that is not an exploration amount—for example:
- payments for entering into a farm-in agreement
- payments for mining information
- payments (other than exploration amounts) to transfer interests in exploration authorities.
As a farmee, you have ongoing obligations when claiming a concession. The obligations for upfront farm-in agreements differ from those for deferred farm-in agreements.
The following table explains how transfer duty normally applies and the different rules for farm-in agreement concessions.
| General transfer duty rules | Transfer duty farm-in concession rules |
|---|---|
| Dutiable value of a transaction is the greater of the consideration for the transaction or the unencumbered value of the dutiable property
Parties to the transaction may need to provide evidence of value to confirm the unencumbered value |
The dutiable value for a farm-in agreement is limited to the consideration for the agreement |
| ‘Consideration’ generally refers to what is received to transfer the property (usually a monetary amount) | Exploration amounts are excluded. Transfer duty applies to any other consideration for the farm-in agreement, regardless of what it is for |
| Transfer duty is assessed on the dutiable value when the agreement is entered into | Some parts of the consideration are not assessed with duty until interests in the exploration authority are transferred or retained under deferred or upfront farm-in agreements |
Also consider…
- Learn about eligibility for the farm-in agreement concession.
- Find out how to apply.
- Read examples of the concession.