Water allocation market

  • A water allocation is an authority to take water, and an entitlement to a share of the available water resource in a catchment.
  • A water allocation has a title separate from a land title and can be bought and sold independently in a similar way to land. This enables water allocation holders to buy water to expand their operations or sell water they don't need.
  • Trading is voluntary and prices are set by the market.
  • Anyone can buy a water allocation – you do not need to be a landholder – however, movement of the water is restricted by trading rules specified in a water management protocol or the Water Regulation 2016.

Water allocation trading may include the permanent transfer or lease of an allocation to another party, or it may relate to other transactions such as subdividing or changing the location of an allocation. Formal approval may be required for some dealings and a permanent trade always requires registration on the Department of Regional Development, Manufacturing and Water Water Allocations Register (WAR).


Currently surface water allocations can be permanently transferred in Queensland; and markets are also being opened to allow for the permanent transfer of underground water allocations. From time to time, regulations may also allow for the permanent transfer of interim water allocations in particular water supply schemes.

A tradeable water allocation may be established by the conversion of a water licence or interim water allocation through a water entitlement notice. If an existing water entitlement is about to be converted to a tradeable water allocation you may need to consider your tenancy arrangements.

Permanent trading involves the permanent transfer of the ownership of a water allocation title, similar to the sale of a land title. All water allocation dealings including permanent trades must be registered on the WAR — an accurate and secure register that centrally records ownership and other information on water allocations.

While a permanent water allocation trade does not have to be approved by the department, there may be additional registration or other requirements. For example, a water allocation holder who proposes to transfer or lease a water allocation not managed under a resource operations licence must give the chief executive notice of the proposed transfer or lease.

Leasing a water allocation

A water allocation may also be leased for a defined period of time. A water allocation lease is similar to a lease of land; however, only whole water allocations can be leased. When a water allocation is leased, all the benefits and responsibilities of holding the allocation are transferred to the lessee for the period of the lease. For example, if the announced allocation is increased after an inflow, the additional water is available to the lessee.

Water allocation leases do not have to be approved by the department, but they must be registered on the WAR using a Form 7 - Lease/sublease.

Where water can be traded

Water trading is available where water allocations have been established; that is, once a water management protocol or operations manual has been approved for an area. The water management protocol sets out the rules for water sharing and permanent water trading of supplemented and unsupplemented water allocations within the plan area, while the seasonal water assignment rules will be contained in the operations manual for supplemented water.

A change to the location of a water allocation is possible between zones and is dependent on the trading rules in the relevant plan area.

Interstate water trading with New South Wales is currently available in the Border Rivers and Macintyre Brook Water Supply Schemes.

Water being permanently traded

In 2015–16 more than 120,000 ML of water (surface water and underground water) was permanently traded in Queensland. Reports on permanent water trades are available which present the number, volume and weighted average price of water trades.

Trading implications

Water allocations are assets separate from the land, with their own registrable title. They are held as personal property and may be treated differently from land after the death of the allocation holder. Anyone being granted, or acquiring, a water allocation should seek professional advice about issues that may affect their will. There may be tax (e.g. capital gains tax) and duty implications as a result of water allocation dealings.

As departmental staff are unable to provide legal or financial advice, you should seek appropriate professional advice to ensure your interests are protected. You may also engage the services of qualified persons to assist in other aspects of water allocation dealings for example, conveyancing.

Water extraction without an appropriate authorisation can impact on the security of supply or reliability of other entitlements; such activities are open to investigation and a range of enforcement measures.