Foreign interests will usually require approval from the Foreign Investment Review Board before they can acquire rural land unless the acquisition is of a business of primary production valued at less than $100 million.

While requiring FIRB approval, acquisitions of such businesses valued at $100 million or more will normally receive approval unless deemed contrary to the national interest. Foreign governments or their agencies are also required to attain approval irrespective of the size of the investment.

Substantial primary production business

There are no hard and fast rules that define what constitutes carrying on of a business of primary production. The nature of the activity, the party’s intention and the method of operation help determine whether a business of primary production is being carried on.

Indicators that a primary production activity is a business include:

• that it is operating as a significant commercial activity, and not a recreation or hobby;
• it is the intention of the business to make a profit from the activity;
• repetition and regularity of activity;
• activity organised and carried on in a businesslike manner with associated business records and reports;
• reasonably large scale operation; and
• commercial scale of sales of product.

The business should also meet the following criteria:

• the value of the business’ urban land should be less than 50 per cent of its total assets; and
• the land on which the business is being conducted should be zoned rural and not residential.

To determine if your business falls into the primary production category, contact the Australian Taxation Office or view their ruling on “Am I carrying on a business of primary production?”