Family Farms NSW: When Duty Applies (2025)

NSW decides “when duty calls” for family farms primarily under the Duties Act 1997 (NSW) by testing whether a transaction is a dutiable transaction (e.g., transfer of dutiable property, including land) and, if a concession is claimed, whether the land genuinely qualifies as “primary production land” and the parties and circumstances satisfy the strict conditions of NSW family farm relief (including evidence of current and intended use, and compliance with any post-transfer requirements). From an Australian accounting practice perspective, the duty outcome is often determined less by the family relationship and more by provable land use, structure (individual/trust/company), and the documentary trail supporting eligibility.

What does “Family farms: NSW decides when duty calls” mean in practice?

It means NSW Revenue applies clear statutory tests to determine whether transfer duty is payable on farm transfers, and it will require evidence that the land is used for primary production and that the transaction fits within a concession/exemption pathway (if claimed). In practice, duty commonly “calls” when family members restructure ownership (succession planning), move land into or out of entities, or adjust trust arrangements—often assuming “it’s in the family” means duty-free, which is not established in NSW law.

• Duties Act 1997 (NSW): the core NSW transfer duty legislation.
• Revenue NSW rulings and practice guidance: interpretive guidance on primary production land and concession eligibility.
• Duties Regulation (NSW) and related instruments: supporting rules and evidentiary expectations.

When does NSW transfer duty apply to family farm transactions?

NSW transfer duty applies when there is a dutiable transaction involving dutiable property in NSW (including land), unless an exemption or concession applies. For family farms, the highest-risk transactions are ordinary transfers, entity restructures, and trust changes that change beneficial ownership.

• Transfer of freehold title from parents to children (gift or sale).
• Transfer into a family discretionary trust, unit trust, or company.
• Transfer out of a trust to beneficiaries.
• Adding/removing owners on title (including “1% to a child” arrangements).
• Deceased estate transmissions followed by onward transfers (the transmission may be treated differently to subsequent transfers).
• Transactions involving related parties at undervalue (duty is generally assessed on dutiable value/market value concepts under NSW duty law, subject to rules).

From a practice risk lens, NSW duty issues typically arise when advisers focus solely on income tax outcomes (CGT rollovers, small business concessions) and do not model NSW duty concurrently.

How does NSW determine whether land is “primary production land” for duty relief?

NSW determines primary production status by factual use and evidence, not by labels (e.g., “it’s zoned rural” or “we run cattle sometimes”). The land must satisfy the NSW concept of primary production land used for primary production (as understood under NSW duty law and Revenue NSW guidance), and the use must be genuine, material, and supported.

• BAS/IAS data consistent with primary production activity (GST turnover patterns, input profiles).
• Financial statements showing primary production income and expenses (fodder, agistment, vets, diesel, repairs).
• Stock records, livestock movement data, cropping records, water licences usage where relevant.
• Lease or agistment agreements (if the land is used by related or third parties).
• Land tax/valuation records and any rural use classifications (helpful but not determinative).
• Photographic evidence, farm management plans, and insurance schedules supporting active farming.

• ATO and NSW are different regimes. ATO tax characterisation (e.g., “primary production business” for income tax) does not automatically determine NSW duty outcomes, but consistent business records substantially strengthen the position.
• According to ATO guidance on primary production businesses and record-keeping expectations, contemporaneous documentation is essential to support claims (e.g., business nature, income/expense nexus, and substantiation). See ATO record keeping guidance and primary producer resources.

Is NSW duty relief automatic for “family farm” transfers?

No—NSW duty relief is not automatic merely because parties are related. A concession/exemption must be specifically available and correctly claimed, and the conditions must be met and evidenced.

• The relationship and whether the transaction fits the “family farm” relief category (where applicable).
• Whether the land is genuinely used for primary production at the relevant times.
• Whether there are mixed-use elements (farmhouse, lifestyle blocks, short-stay accommodation) that may taint eligibility.
• Whether there is a broader restructure that changes beneficial ownership beyond the family concession’s scope.

• If the transaction is part of a broader restructure (e.g., moving land into a trust plus issuing units plus bringing in siblings), the relief analysis must be done per step, not based on the “overall intention”.

How do income tax and NSW duty interact for family farm succession?

They are separate systems, and optimising one can worsen the other. The correct approach is an integrated model: NSW duty, CGT, small business CGT concessions, Division 7A (if companies are involved), GST, and estate planning outcomes.

• CGT events on disposals of farmland and interests in entities (Income Tax Assessment Act 1997 (Cth), Part 3-1 and Part 3-3).
• Small business CGT concessions (ITAA 1997, Division 152) where eligibility exists (active asset test, significant individual tests, etc.).
• Division 7A (Income Tax Assessment Act 1936 (Cth), Division 7A) where farm land is shifted around a private company structure or where shareholder/associate loans arise from buyouts.
• GST and farmland: potential GST-free supply of a going concern or farmland rules (A New Tax System (GST) Act 1999 (Cth)), depending on circumstances and whether the “farming business” continues.

• A duty concession that requires continuity of primary production use can collide with an income-tax-driven plan to subdivide, develop, or change use shortly after transfer.

What scenarios cause NSW to say “duty calls” even within the family?

NSW commonly imposes duty (or denies relief) where the facts show the farm is not, in substance, a primary production asset at the relevant time or the transaction exceeds the concession boundary.

• Lifestyle property: minimal stock, hobby income, or irregular activity unsupported by accounts and BAS.
• Mixed-use: substantial residential/short-stay use or non-primary production activities that dominate.
• “Parking” land in a trust: transfer to a discretionary trust for asset protection without a clear concession pathway.
• Debt and buyout complexity: one child buys out another using company/trust funding, triggering duty and potential Division 7A consequences.
• Entity admissions: bringing in non-family investors/partners, even indirectly (units/shares).
• Documentation gaps: no farm business records, weak substantiation, inconsistent tax reporting.

How should accountants document and defend a family farm duty position in NSW?

Accountants should treat duty eligibility as an evidence-led file, similar to an ATO review-ready tax position. The objective is to make the NSW assessment straightforward: dutiable value analysis, concession pathway (if any), and proof of primary production use.

1. Identify the exact dutiable transaction(s): transfer, declaration of trust, surrender, change in beneficial ownership, etc.
2. Map parties and structures: individuals, trusts, companies, beneficiaries, units/shares, controllers.
3. Prepare a “primary production evidence pack”:
4. Obtain valuations where required:
5. Reconcile to income tax filings:
6. Keep a post-transfer compliance plan:

It should be noted that inconsistent tax positions can create audit friction across agencies. A clean, internally consistent narrative across NSW duty, ATO income tax, and GST is materially defensible.

What are real-world examples of NSW family farm duty outcomes?

These are anonymised scenarios reflecting common NSW practice outcomes.

• Facts: Parents transfer a 2,000-acre grazing property to their daughter who already runs the cattle enterprise; BAS shows consistent primary production turnover; stock records and agent statements exist.
• Likely duty outcome: Duty still applies unless a specific NSW relief is available and claimed; however, eligibility for primary production-related relief (where applicable) is materially strengthened by evidence.
• Accounting focus: evidence pack + valuation + integrated CGT modelling (including Division 152 eligibility where relevant).

• Facts: 60-acre property, limited livestock, no meaningful turnover, expenses largely private, inconsistent GST registration.
• Likely duty outcome: NSW is likely to treat as non-qualifying for primary production-based relief; duty assessed on transfer.
• Accounting focus: risk disclosure to client; consider alternative succession mechanics (estate planning) rather than inter vivos transfer.

• Facts: Parents transfer farm land to a new family discretionary trust; beneficiaries include adult children; no clear concession basis.
• Likely duty outcome: Duty generally payable because it is a transfer of dutiable property; concessions are limited and condition-based.
• Accounting focus: model duty upfront; explore whether any restructure relief is available; consider staged strategies.

• Facts: Farm in parents’ names; one sibling buys the other out; funds are advanced from the family company/trust.
• Likely duty outcome: Duty on the transfer; also high Division 7A exposure if a private company makes payments/loans to shareholders/associates without complying loan agreements (ITAA 1936, Div 7A).
• Accounting focus: duty modelling + Division 7A compliant loan terms + documentation.

How does MyLedger help accountants manage farm compliance and duty-readiness?

MyLedger (by Fedix) does not replace legal advice on NSW duty, but it materially improves the accounting evidence, reconciliation speed, and working paper quality that underpin defensible duty and tax positions. For family farms, the decisive advantage is fast, consistent, audit-ready bookkeeping and working papers—exactly what Revenue NSW and the ATO expect when claims are tested.

• Automated bank reconciliation: MyLedger typically reduces reconciliation from 3–4 hours to 10–15 minutes per client (around 90% faster), helping practices keep farm accounts current.
• AI-powered reconciliation and consistent GST enforcement: supports cleaner BAS and GST treatment, reducing inconsistency risk.
• Automated working papers: reduces manual Excel working papers and improves file defensibility.
• ATO integration: direct ATO data import and due date tracking supports consistent compliance hygiene (BAS/IAS/ITR).
• Practice economics: all-in-one pricing (expected $99–199/month for unlimited clients after beta) versus per-client models common with some competitors, improving margin where you service multiple farm entities.

• Reconciliation speed: MyLedger = 10–15 minutes typical, Xero/MYOB/QuickBooks = commonly 3–4 hours when accounts are messy or bank rules are immature
• Automation level: MyLedger = AI auto-categorises around 90% immediately, others = more manual review/rules-dependent
• Working papers: MyLedger = automated working papers suite (including compliance-focused schedules), others = typically Excel/manual packs
• ATO integration: MyLedger = complete ATO portal-style integration and ATO statement/transaction import, others = generally more limited ATO connectivity
• Pricing model for practices: MyLedger = designed for unlimited-client firm workflows, others = often per-client subscription economics

What should accountants do before recommending a NSW family farm transfer?

Accountants should insist on a pre-transfer “duty + tax + evidence” workshop before documents are signed. Once a transfer occurs, duty and tax consequences are difficult to unwind.

1. Confirm transaction type: sale, gift, trust transfer, company restructure, estate transmission.
2. Confirm land use: primary production evidence, mixed-use risks, intention post-transfer.
3. Build an integrated model:
4. Prepare the evidence pack and file notes for defensibility.
5. Obtain specialist legal advice for NSW duty and conveyancing execution, then align accounting documentation to the legal position.

Next Steps: How Fedix can help

Fedix helps Australian accounting practices get farm clients “review-ready” by automating the heavy work that causes delays and weak evidence—bank reconciliation, GST coding consistency, and working papers production.

• Learn more at home.fedix.ai and request a MyLedger walkthrough.
• Use MyLedger’s AutoRecon to cut reconciliation time by about 90% (10–15 minutes instead of 3–4 hours) so farm accounts are current before any duty-sensitive transfer is executed.
• Standardise your farm evidence pack production (BAS/ITR consistency, transaction support, working papers) to reduce Revenue NSW and ATO review friction.

Conclusion

NSW decides “when duty calls” for family farms by applying the Duties Act 1997 (NSW) to the transaction and then testing any claimed concession/exemption against strict eligibility criteria—especially the factual use of the land for primary production and documentary proof. For accountants, the professional standard is clear: do not treat family succession as duty-neutral, model NSW duty alongside ATO income tax and GST, and build an evidence-led file that will withstand Revenue NSW scrutiny. MyLedger by Fedix strengthens that position by making farm accounts current, consistent, and working-paper-ready at scale.

Disclaimer: This article is general information only and does not constitute legal or taxation advice. NSW transfer duty outcomes depend on the specific facts, current Revenue NSW practice, and legislative change. Professional legal advice should be obtained before implementing any duty-sensitive restructure or transfer.

Frequently Asked Questions

Q: Is a family farm transfer duty-free in NSW?

Q: What evidence best supports “primary production land” for NSW duty purposes?

Q: Can I move a farm into a family trust in NSW without duty?

Q: How do ATO tax rules affect NSW duty on family farms?

Q: How can MyLedger help with NSW duty risk management for farm clients?