Eligibility for farm-in agreement concessions

You need to have a qualifying farm-in agreement to be eligible for the concessions. A qualifying farm-in agreement is either a deferred farm-in agreement or an upfront farm-in agreement.

The main difference between an upfront and deferred farm-in agreement is when the interest in the exploration authority is transferred by the farmor to the farmee.

Under a deferred farm-in agreement, the transfer of an interest in the exploration authority to the farmee happens once the exploration amount specified has been spent.

Alternatively, under an upfront farm-in agreement, the interest in the exploration authority is immediately transferred to the farmee. After spending the exploration amount specified, the farmee is entitled to keep the interest.

The following table explains the main requirements for the concessions and disqualifying factors for each.

Requirements to satisfy What the concessions do not apply to
There is a written agreement between farmor and farmee
  • Documents that do not contain the entire agreement
  • Documents that are not an agreement for transfer of an interest in an exploration authority
The exploration authority is granted and held by the farmor when the agreement is entered into
  • Agreements for production authorities (e.g. mineral development licences and mining leases)
  • Agreements where the application for the exploration authority is not yet approved when the agreement is entered into
  • Any authorities granted to replace the exploration authority specified in the agreement
The written agreement is either a deferred farm-in agreement or an upfront farm-in agreement Agreements that have elements of deferred and upfront farm-in agreements

The farm-in agreement clearly specifies for each interest transferred:

  • a monetary amount to be spent on relevant exploration or development (exploration amount)
  • the date by which the exploration amount must be spent (expenditure completion date)
  • all of the exploration or development activities (which must be ‘in ground’ activities) to be performed
  • the percentage interest in the exploration authority to be transferred to, or retained by, the farmee upon spending the exploration amount by the expenditure completion date (each interest must be less than 100%)
  • Agreements that are solely milestone- or outcome-based (e.g. completion of a preliminary engineering design for mine and infrastructure)
  • Other costs, such as legal, administration and management fees
  • Transfers of non-legal interests in exploration authorities (e.g. acquisition of participating interests in a joint venture that holds exploration authorities, or acquisitions of the non-metal rights in an authority)
  • Transfers of interests in exploration authorities other than between the farmor and farmee named in the farm-in agreement (e.g. transfers of interests to or from subsidiaries of the farmor or farmee)
The whole of each exploration amount is spent after the agreement is entered into Amounts spent before the agreement is entered into

Read the public ruling about what constitutes an exploration amount (DA000.13) to learn more.

See the examples of how the concessions apply.

Requirements for keeping the concession

Because the concessions are applied when the agreement is first assessed for transfer duty, farmees need to satisfy ongoing requirements to keep the benefit of the concessions, including:

  • spending the stated exploration amount on exploration and development activities described in the agreement by the expenditure completion date for the interest
  • notifying the Commissioner of State Revenue and lodging the required documents within the prescribed time frames after spending the exploration amount for the interest
  • notifying the Commissioner and lodging the required documents within the prescribed time frames if the exploration amount has not been spent by the specified date (farmees must notify the Commissioner where the expenditure completion date is agreed to be varied).

Contact

Office of State Revenue

  • Call 1300 300 734 (Australia) or
    +61 7 3179 2500 (overseas)
  • Send an email using our online enquiry form.