Selling rural property requires additional considerations not common to the transfer of residential property. Ancillary to the land and improvements is the ‘business’ of the farm which may involve the transfer of crops, stock, plant and machinery.

There may be water rights that will form part of the sale and may be held separately to the title of the land. These will need to be transferred through the relevant Government authorities.

Government bodies such as Local Land Services and Crown Lands play an important role in answering purchaser enquiries with respect to rates, stock health, pest control, chemical residue and crown roads.

The Contract

The contract for sale of your rural land may include many titles. Details of each title needs to be included showing the relevant lot and deposited plan for identification by a prospective purchaser.

If the sale includes plant and equipment or stock, an inventory should be included itemising details.

If relevant, the contract may set out the agreed apportionment of the price (farming land, dwelling and water licences) for taxation purposes.

When selling your land, a mortgagor is advised of the pending sale to enable the release its security over the property. If plant and equipment is subject to finance or leasing arrangements, the lender is contacted to ascertain payout figures and its requirements to release the security in anticipation of settlement.

The purchaser will carry out a PPSR (Personal Property Securities Register) search to ensure that all vendor security interests will be released on or before settlement.

Duties of disclosure and warranties

Whilst it is commonly accepted that the concept of caveat emptor (buyer beware) applies when purchasing property, vendors must ensure that the contract contains certain ‘disclosures’ about the land and improvements. Vendors must also give certain warranties about the land and improvements.

Disclosure documents generally include a copy of the titles and deposited plans of the property details of all registered ‘interests’ over the land such as easements, rights of carriageway and positive or restrictive covenants and planning certificates from local Councils which provide details of the zoning of the land, planning controls and other matters affecting the use of the land.

Information will also include water rights and dam registrations and Crown land matters.

Your lawyer will discuss the disclosure requirements with you and obtain the necessary documents for inclusion in the contract.

Proposed purchasers will likely investigate whether the land or stock are affected by chemical residue, livestock disease, crop infestations or feral animals. Enquiries are made through the relevant authorities by the purchaser’s lawyer however it is usual for a purchaser and vendor to discuss these matters during negotiations.

Adverse affectations may constitute a breach of a prescribed warranty and may, depending on the extent of the affectation, enable a purchaser to rescind (cancel) a contract. Farm owners should therefore discuss potential notices with their lawyer before the contract is prepared so they may be appropriately addressed.

Special conditions are included in the contract restricting a purchaser’s entitlement to rescind or claim compensation for matters disclosed in the contract or for matters concerning the use of the property, the state and condition of improvements, the position of fencing and other relevant matters.

Water entitlements

If there are water entitlements the contract will include details of water licences, access, irrigation rights and pump approvals and provisions as to how these are to be dealt with or transferred.

Rates and charges for water access are obtained from the relevant authorities and adjusted on settlement.

Enlisting your professional team

The sale of a farm will have taxation implications and it is often recommended that your financial adviser work with your lawyer to ensure that matters such as price apportionment, income tax and GST are considered in the overall arrangements. The object should be to structure the transaction to achieve the most profitable outcome possible.

If you are selling your property to a family member they may be able to apply for an exemption from stamp duty as an intergenerational transfer, representing significant savings.


If you are thinking of selling your farm or would like more information on other rural issues such as share farming agreements, succession planning for farms, water, land access or boundary disputes, please contact us on 1800 618 869 or email [email protected].