How do you advertise a rural property?

Firstly, it is best to understand the definition of a rural property or rural farm to market it correctly when you wish to sell a farm. The reason is that there are a multitude of farm types and a multitude of major websites and portals to advertise your farm for sale in Australia. The different farm types include:

• Lifestyle
• Hobby
• Farmlet
• Acreage
• Commercial Farm (Income Producing) which include, cropping, dairy, horticulture, Livestock, Mixed Farming, Horticulture, Viticulture etc.

The first 4 types in the list above are best to be listed for sale onto the major sites like a normal property but to be listed either under ‘Rural’ or ‘Semi Rural’.

 When it comes to Productive farms (which can or do produce an income) it is best to list it onto BOTH the residential/rural sites PLUS the Commercial sites. This way you double up on getting the maximum exposure.   Companie s like NoAgentProperty have been servicing the rural community for their property sales for over 22 years and have experienced consultants to assist.  So, How do you market a rural property? – Be sure to advertise your farm for sale onto the right websites and portals. So, to sell rural property, be sure to ask all the right questions to find out your best options.

How do you sell a farm?

Selling a farm is not dissimilar to selling an ordinary property as you will need a solicitor or conveyancer to draw up a contract of sale and a vendor statement. A vendor statement will show all of the inclusions that go with the farm (i.e. tractors, tools, cattle yards etc). In addition, if your farm produces an income, then financials may need to be included in your documentation. Different farm types warrant different financials and information such as:

• Cropping: Approximately 5 years of farm records
• Yields:   About 3 years of farm records
• Lambing percentages
• Calving rates
• Milk yields: Average per cow
• Drainage plans: Including any recent improvements.
• Water Rights

So, How Do I Sell a farm?: To sell rural property is not hard. Just ensure to plan ahead, prepare your property and have your financials available for prospective buyers. You may also consider to sell your farm as a Private Seller to ensure you do not pay any agent commissions.

Private Sale (Private Seller) VS An Agent Sale when selling a farm?

Although there are some specialist agents that sell farms, it is often best to sell your farm as a Private Sale and sell it privately (For Sale By Owner or FSBO). In this case, selling privately means that you advertise your farm for sale and deal with prospective buyers yourself. To sell rural property is not hard as your farm is likely to be wanted by similar minded people to you who a looking for a farm to buy. Remember it is the legal system (a conveyancer or a solicitor) who will put all of your paperwork together, so all you’ll need to do when selling a farm privately as a for sale by owner seller, is to use a good company that can facilitate it for you and list your farm for sale onto major websites. To sell a farm privately (private sale), will also save you thousands of dollars as most Rural Agents charge from 3% of your total sale (including your equipment value). See this handy calculator to see how much you will save by selling privately.

How do I avoid capital gains tax when selling a farm?

There is such a thing as ‘Farming out capital gains tax’.   This can be achieved when your farm produces an income, it can be deemed as a business, for example:

Under the 15-year exemption the whole of the capital gain made on the sale of an active asset, such as farming property, is tax exempt. To qualify, the business owner must be retiring or unable to work due to being permanently incapacitated. In addition, the asset must have been owned continuously for 15 years and it must have been an active asset for at least seven-and-a-half years.

Further examples can be seen on the ATO website – Click here: https://www.ato.gov.au/individuals-and-families/investments-and-assets/capital-gains-tax?=Redirected_URL

It is also highly recommended to speak with your accountant as there are many other possible exemptions of capital gains tax that you can explore.

Also, if you sell a farm privately (private seller) or with an agent, CGT is exactly the same.

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What is the tax rate for farm income?

In 2016, family farm households faced an estimated income tax rate of 17.2 percent on average.

As unusual as it is, there is no definition of “farmer” for tax purposes. Instead, the Australian Taxation Office (ATO) defines farming within a broader category of “primary producers”. They can claim different tax incentives and are subject to different tax rules.  Running a farm that produces an income can be deemed just as a business.   It is often best to seek advice for your accountant to ensure that you are claiming/depreciating and paying the correct taxes.  There are many exemptions for farmers to explore.

What do you need to be considered a farm?

The definition of a farm is:  A farm is defined as any place from which $1,000 or more of agricultural products were produced and sold, or normally would have been sold, during a year.

If you do not produce an income, then your farm is either a hobby farm or lifestyle farm, or just rural acreage.

What is the capital gains exemption for farmers?

Capital gains exemption means that you are exempt (don’t need to) pay a capital gain when you sell your farm.  However, it is extremely important to check if you are exempt or in fact have to pay Capital Gains Tax (CGT) in advance when you want to sell your farm.  A capital gain on the sale of a working farm is subject to capital gains tax (CGT), while selling, leasing or subdividing a working farm is GST-free in some circumstances.  It is important to understand your obligations, that is why it is best to seek advice from your accountant.   You may be exempt from a capital gain, or possibly may have to pay full CGT.  It is also dependent on whether you own the farm as an individual, a business, a trust etc.  Again, your accountant will advise. (NOTE: (Whether you sell a farm privately or with an agent in Australia, your capital gains/capital gains exemptions are the same).