Legislative and administrative arrangements for trading water are in place in each state and territory and vary between jurisdictions.
Most trades require approval of a Trade Approval Authority and, for entitlement trades, registration of the transaction on the relevant water register. There are however, a number of differences between the trading processes and roles and responsibilities of agencies involved in water trading in each state and territory.
There are a number of fees and charges which may apply through out the trading process. These include:
- Search/application/transaction/registration fees
- Rural water utilities start up fees
- Termination fees
- Stamp duties
- Goods and Service tax
- Brokerage fees
- Capital Gains Tax
As water trading has significant legal and financial implications, you may feel it is necessary to seek independent professional advice to assess your individual situation or engage an intermediary to undertake the process. People commonly seek assistance from accountants, lawyers or water brokers.
There are a number of rules and restrictions which govern the circumstances under which water rights can be traded or transferred. These should be considered prior to undertaking a trade. See the Rules and restrictions section for more information.
To access state and territory specific trading process information click on the tabs above.
Water trading and taxation
Income and capital gains made through water trading are assessable under the Income Tax Assessment Act 1997. Whether profits from water trading are subject to income tax or to capital gains tax depends on the transaction type and the business operation type of the trader. Water traders must report correct information regarding all income and capital gains, including income and capital gains obtained through water trading, to the Australian Taxation Office.
For information on water trading and taxation, see the speech hosted on the Australian Taxation Office’s website entitled National water trading and taxation - Australian Water Summit - November 2004.
For specific information on water trading and capital gains tax, see the speech hosted on the Australian Taxation Office’s website entitled Capital gains tax and trading of water entitlements - 3rd A-Z of Australian Water Trading Conference - November 2004.