At Lovett & Green, looking after farmers who are buying and selling rural properties is what we do best.
With acquisition prices for rural land soaring in recent years, the risk in purchasing farming properties also grows. That’s why you need a trusted advisor looking after your interests.
There are a number of things to consider when buying a farm compared to buying a residential property. Your lawyer needs to consider the GST position of the transaction, livestock diseases, chemical residues, land use planning, mineral exploration, any water access licences, and many other matters unique to rural land.
Understanding the legal aspects of buying rural property is crucial to ensuring a smooth transaction and avoiding future disputes. Here are some key legal considerations to keep in mind when buying a farm in NSW.
1. Property Title and Ownership
Before purchasing, it’s essential to verify the property title to ensure the seller has legal ownership and the right to sell the farm. A title search will reveal any encumbrances, easements, or covenants attached to the property. These could restrict how you use the land or impose certain obligations on you as the owner.
2. Zoning and Land Use Regulations
Zoning laws in NSW dictate what activities can be conducted on a piece of land. It’s crucial to check the zoning classification of the property to ensure it aligns with your intended use, whether that’s agriculture, building structures, or other purposes. You should also investigate any land use restrictions that might apply, such as environmental protections or heritage overlays.
3. Water Rights and Licenses
Water is a critical resource for farming, and NSW has strict regulations governing water usage. When buying a farm, it’s important to understand the water rights associated with the property. This includes any water licenses that come with the land, as well as the rules governing access to and use of water from rivers, creeks, dams, or bores. Ensure that the property has the necessary water rights to support your farming activities.
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4. Contracts and Due Diligence
The contract of sale is a critical document that outlines the terms and conditions of the purchase. It’s advisable to have a solicitor review the contract to ensure it includes all necessary provisions, such as conditions for financing, inspections, and any contingencies. Conduct thorough due diligence, including property inspections, surveys, and verification of legal compliance, before finalizing the purchase.
5. Taxation and Financial Obligations
Buying a farm comes with various tax implications, including stamp duty, capital gains tax, and potential land tax. Understanding these obligations is important for financial planning. We can advise you on acquisition structures to benefit you in the future.
6. Dispute Resolution and Legal Recourse
In the event of a dispute over the property, it’s important to know your legal rights and the avenues available for resolution. This could involve disputes over boundaries, water access, or compliance with local regulations. Having a clear understanding of your legal recourse options and including dispute resolution clauses in your contract can help protect your interests.
At Lovett & Green, we help farmers with their legal problems, so they can focus on the farm.
