We determine whether properties are to be classified as farm according to the definitions set out in the rating declaration that is made as part of the budget process each year.
Our objective in having a Farm Differential Rate and Rebate is to encourage the retention of large lot primary production holdings where a commercial farm business is being conducted. We have used a combination of differential tariff and rebate in order to maintain the status of farms as the lowest rated tariff group.
Criteria for eligibility
To be eligible for the Farm Differential Rate and Rebate, the property must comply with the Farm Land definition set out below.
Farm Land – means any land which:
is not less than 2 hectares in area and
is used predominantly for the business of grazing (including agistment), dairying, pig-farming, poultry farming, fish farming, tree farming, bee-keeping, viticulture, horticulture, fruit growing or the growing of crops of any kind or for any combination of those activities or
satisfies the criteria for municipal purpose benefit for large holdings to the extent that it is, for example, land that is predominantly used and maintained for heritage, cultural or environmental purposes, or land that is held as natural bushland under a trust for nature covenant, or land that is held under some other type of similar formal undertaking.
A business is defined by the Valuation of Land Act as:
has a significant and substantial commercial purpose or character and
seeks to make a profit on a continuous or repetitive basis form its activities on the land and
is making a profit from its activities on the land, or that has a reasonable prospect of making a profit from its activities on the land if it continues to operate in the way that it is operating.
For the farm rating differential, the context of a primary production business is regarded as the farming:
- activity / activities carried on the property must be carried on as a commercial venture organised for profit. This would be evident by the presence of an Australian Business Number, Business Name, levels of activity and income substantiated by appropriate book keeping practices.
- carried out must be on a sufficient scale as to have some element of independent viability, therefore not supported by alternate income sources. The purpose of the farming activity must be ongoing and the result being of significant commercial volume.
- activity / activities carried on must have a requisite degree of commercial purpose or character, that is, if the activities will only ever produce small returns then they would be considered to be of a slight or minor character (Hobby Farm). Seasonal fluctuations should not affect this outcome.
In determining whether the Farm Differential Rate and Rebate apply to your property, the predominant use or activity on the property must be identified. The planning zone or zones applicable to the property are not necessarily pertinent to the actual activity conducted on the property.
There are a number of “rural” uses that, over time have been identified by the Victorian Civil and Administrative Tribunal as not “being eligible” for farm land rating. Hobby farms and rural retreats are not considered to be true farming business.
This also includes the grazing and agistment of recreational or race horses as the horses in this context are not being used as farm animals.
If your farm satisfies the above criteria you may be eligible for the rebate. Download the application form below and return it to us.
All the evidence relating to the land use will be considered as part of this review and you are encouraged to complete the application attaching any supporting documentation. Details of future plans to further develop your business may also be helpful as a demonstration of your commitment to the ongoing viability of your farming business and use of the land for primary production purposes (for example: Farm Management Plan).
Forms are also available by phoning our customer service team.