Family farm exemption

Key information

The transfer of all or part of a family farm (including a life estate or estate in remainder in land) may be exempt from land transfer duty if the following conditions are met:

• The property is primary production land for land tax purposes.
• There is a familial link between the transferor and the transferee.
• The transfer is not for the principal purpose of taking advantage of the benefit of this exemption.

This exemption is separate from the duty exemption for young farmers buying their first farm.

Type of land

The property subject of the transfer must be:

• an interest in land, including:
  • an estate in fee simple,
  • a life estate, or
  • an estate in remainder, and
• land of a type referred to as primary production land for land tax purposes. Whether land is primary production land depends on how the land is used and its location. For details see primary production land for land tax purposes.

Eligible transferor

To receive this exemption, the transferor of the family farm property must be one of the following:

• A natural person, or
• A company (not acting as trustee) where:
  • all shares are owned by natural persons, and
  • those persons are relatives of each other, or
• A trustee for:
  • a natural person, or
  • a discretionary trust with capital beneficiaries limited to natural persons who are relatives of each other, or
  • a fixed trust with beneficiaries limited to natural persons who are relatives of each other.

Eligible transferee

The transferee of the family farm property must be one of the following:

• A natural person who is:
  • a relative of a natural person transferor described above, or
  • a shareholder in the transferor company described above in which all the shareholders are relatives, or 
  • a beneficiary of the transferor trust described above.
• A trustee of a fixed or discretionary trust, the beneficiary, or beneficiaries if there is more than one, of which is a relative of the natural person connected to the transferor. For example, if the transferor is:
  • a natural person, the beneficiary of the transferee trust must be a relative of that natural person transferor.
  • a trustee for a trust, the beneficiaries of the transferee trust must be relatives of the beneficiary, or beneficiaries if there is more than one, of the transferor trust.
  • a company, the beneficiaries of the transferee trust must be relatives of the shareholders of the company.

The trust deed cannot contain a variation clause that would permit the distribution of the family farm to parties other than relatives or charitable institutions. In those circumstances, the exemption does not apply.

The exemption still applies if a trust can be varied to include additional relatives who are entitled to a distribution of a family farm.

The transferee or one of the transferees can also be a charitable institution, which is a corporation or body of persons associated for charitable purposes.

Relatives

For natural persons, a relative means any of the following:

• Child or more remote lineal descendant (grandchild, great-grandchild, or similar) of the person or the partner of the person. A child includes a legally adopted child or an illegitimate child. If it is a stepchild or step-grandchild, they must be a direct lineal descendant of the spouse of the transferor to qualify as a relative. Not all stepchildren or step-grandchildren are regarded as relatives under the definition.
• Parent or more remote lineal ancestor (such as grandparent, great-grandparent or similar) of the person or the partner of the person.
• Brother or sister (siblings) of the person or the partner of the person.
• Partner of the person or a partner of any person referred to above (i.e. of a child, grandchild, parent, grandparent, sibling or sibling-in-law). A partner includes a person’s spouse or domestic partner, irrespective of gender.
• Child of a brother or sister (niece or nephew) of the person or of the partner of the person.
• Brother or sister of a parent (uncle or aunt) of the person or of a parent of the partner of the person.

If a person is deceased, they are still a relative.

Apply for this exemption

In most cases, your conveyancer will apply for this exemption by using the Digital Duties Form. 

If the transfer is between natural persons, the transfer can be lodged using Duties Online.

If a trust is involved, a copy of the duly stamped trust deed must also be lodged with the application.

Find out more about our Digital Duties Form.