If you are a foreign person (which includes a foreign-owned company and trust) that acquires a registrable water interest during the financial year ending 30 June 2026, and you continue to hold that interest at 30 June 2026, you must notify the Australian Taxation Office (ATO) by 30 July 2026.
While recent reform announcements signal a welcome shift towards streamlining parts of the foreign investment regime, water interests remain subject to a distinct reporting obligation.
Navigating water interest reporting rules
A registrable water interest includes:
- a registrable water entitlement, such as an irrigation right or water access licence (excluding certain rights, including stock and domestic rights, riparian rights and annual water allocations); or
- a contractual water right with a term of more than five years.
The key distinction is timing. For most other asset classes, foreign persons must notify the ATO within 30 days of a relevant action. For water interests, notification is instead made within 30 days after the end of the financial year in which the interest was acquired.
A foreign person must update the Register of Foreign Ownership of Australian Assets within the 30 days following the financial year, during the financial year, you:
- acquire a registrable water interest and continue to hold it at 30 June;
- cease to hold a registrable water interest;
- become a foreign person (or cease to be a foreign person) while holding a registrable water interest; or
- hold an already registered water interest and there is a change in the volume of water or share of the water resource.
Where water interests sit in the FIRB reform agenda
As outlined in our recent article, Foreign investment reform: intended to be easier for low‑risk investors, tougher where it matters, Treasury has proposed streamlining aspects of the Register of Foreign Ownership of Australian Assets, including removing certain registration requirements for some land, business and entity interests.
However, at this stage, water interests are not part of that simplification agenda. The existing reporting regime continues to apply, and investors should expect that water assets will remain an area of ongoing regulatory focus, particularly in the agribusiness context.
How McR can assist
While the registration process itself is relatively straightforward, identifying what needs to be registered is often less so. This is particularly the case where water rights sit within broader landholdings, operating structures or long-term contractual arrangements.
Our FIRB team can assist with:
- identifying registrable water (and other) interests;
- navigating classification issues under the foreign investment framework; and
- managing ongoing compliance and reporting obligations.
Consequences for non-compliance
Failure to notify the ATO in accordance with the requirements may result in administrative penalties, applied on a per-interest basis.
Non-compliance may also have broader implications. As flagged in the recent reform framework, the Government is placing greater emphasis on compliance history, and a failure to meet reporting obligations may affect how FIRB assesses future applications.