This FAQ topic is one of a series from the Department of Water (the department), designed to help existing and potential water users understand their rights and responsibilities in accessing and managing water under the Rights in Water and Irrigation Act 1914.
Should you require further information please contact your local Department of Water office.
Click here to download a pdf version of FAQ 4
QUESTIONS
1. What is the difference between a licence to take water and a water entitlement?
2. What are water transfers, trades and agreements? How do they differ?
3. How do I apply for a water transfer, trade or agreement? Which forms do I need to submit?
4. How will my water transfer, trade or agreement application be assessed?
5. How are water trade values determined? Are there any tax implications associated with these
transactions?
6. I am purchasing a new property. Do I automatically receive a licence to take water?
7. Can I apply to transfer a Licence to Take Water before I have legal access to the property?
8. I have been using groundwater/surface water since I purchased my property.
How do I know if I have a water licence?
9. I am selling my property and hold a licence to take water. What are my legal obligations and
what options do I have in relation to my licence?
10. I have achieved permanent efficiency improvements (e.g. more efficient crop or better use of
technology or infrastructure). Can I trade the water I am now no longer using?
11. I have subdivided my property; can I transfer my water entitlement to several people?
12. How do I find other licensees within my water resource area that I can trade or lease water with?
ANSWERS
1. What is the difference between a licence to take water and a water entitlement?
- A licence to take water is issued under section 5C of the Rights in Water and Irrigation Act 1914. This licence specifies the name of the licensee, the water resource, the location of the property where the water will be sourced and used, the water entitlement, approved usages and terms and conditions relating to the taking and use of water.
- A water entitlement is the quantity in kilolitres (kL), that the licensee is entitled to take under a Licence to Take Water.
2. What are water transfers, trades and agreements? How do they differ?
- A transfer is where a licence to take water is permanently transferred to another person and the water will be taken from the same location. For example, if there is a change in land ownership.
- A trade is where a water entitlement, or part thereof, is permanently traded to another person and the water will be taken from another location. For example, a licensee sells their water entitlement to another person who may take the water from another location and potentially use it for a different purpose. Trades typically occur in fully allocated water resource areas.
- An agreement is a form of lease and occurs via the temporary assignment of a licensed water entitlement, or part thereof, by a licence holder to another party. Agreements cannot exceed the term of the original licence.
Note:
- Transfers, trades and agreements can only take place within the same water resource area (i.e. same groundwater subarea and aquifer, or same surface water area).
- In a resource area that has reached its allocation limit, new licences are generally not issued (unless there are extenuating circumstances); therefore trading or leasing of water already licensed may be the only option for accessing water.
- Trading or leasing water allows for water entitlements to be distributed amongst landholders in fully allocated resource areas.
- Trading, transferring and leasing water can provide some monetary benefit to the licence seller.
- For more information, please refer to Operational policy 5.13 Water entitlement transactions for Western Australia.
3. How do I apply for a water transfer, trade or agreement? Which forms do I need to submit?
Note:
- A non-refundable fee of $200 is to be paid to the department for all transfer, trade and agreement applications.
- Transfer or trade applications linked with a proposed land sale must be submitted to the Department of Water using the relevant form prior to, or within 30 days of property settlement (unless extended using the Form I: Notice that licence holder is not or may not be eligible to hold a licence).
4. How will my water transfer, trade or agreement application be assessed?
Each application is assessed on an individual, transparent and equitable basis in accordance with the requirements of the Rights in Water and Irrigation Act 1914. For further information on the assessment process refer to FAQ 2: Water licensing and how you can apply.
In addition to the standard assessment process the following criteria need to be satisfied:
- The original licence must be returned to the department.
- The transferrer of the licence must provide the department with written approval of all relevant third parties (e.g. agreement holders or security interests).
- The department may request the transferee to advertise the potential transfer, trade or agreement if the proposal requires a significant volume of water or is potentially contentious in nature.
5. How are water trade values determined? Are there any tax implications associated with these transactions?
The value of a transfer, trade or agreement licence is negotiated between the transferee (purchaser) and the transferrer (vendor). The financial value (amount paid for the licence) must be stated on the application form submitted to the department.
The department does not determine trade values and is unable to provide information relating to this matter.
Note:
- Capital gains tax may be payable on the value of a transaction of a water licence acquired after 19 September 1985 – check with the Australian Taxation Office.
- Contracts for transfers, trades and agreements may be subject to Stamp Duty. Check with the Office of State Revenue.
6. I am purchasing a new property. Do I automatically receive a licence to take water?
No. A licence to take water is not automatically transferred with the sale of the property. If you wish to use water, the following options are available:
- Negotiate with the existing property owner regarding the transfer of their licence and make an application to the department, prior to, or within 30 days of settlement.
- If the land seller does not wish to transfer their licence, you must apply for a new licence to take water (refer to FAQ 2: Water licensing and how you can apply).
- If the property is located within a water resource area where the allocation limit has been reached, you will need to apply to trade or lease water from another licensee within the same water resource area. To determine whether the allocation limit has been reached in your water resource area, please refer to the department's 'Water Register' or contact the Department of Water for further information.
7. Can I apply to transfer a Licence to Take Water before I have legal access to the property?
Yes. You may apply to transfer a licence before you have legal access to the property. When a licence transfer is linked with a proposed land sale, and all requirements are met during the assessment process, the department may issue a 'Letter of Undertaking'. Once proof of legal access to the land has been provided, the Licence to Take Water can then be issued.
For further information refer to: Operational Policy 5.05 Giving an undertaking to grant a licence or a permit under the Rights in Water and Irrigation Act, 1914
8. I have been using groundwater/surface water since I purchased my property. How do I know if I have a water licence?
Unless you have applied for a new licence to take water, or applied to transfer the existing licence when you first purchased the property, then you don't have a licence.
If you are unsure of your licensing obligations, you must contact the department to determine if you need a licence (or refer to FAQ 1: Proclaimed areas and water licensing in Western Australia).
If a licence is required, you should:
- check if the property has a current licence and whether you can apply to transfer the licence into your name (refer to FAQ 4: Transfers, trades and agreements)
or
- apply for a new licence, (refer to FAQ 2: Water licensing and how you can apply).
Note: If your water resource area has reached its allocation limit then your application for a new licence to take water may be refused, in which case you may need to find an alternative water source. You may seek to trade or lease water from another licence holder in your water resource area.
9. I am selling my property and hold a licence to take water. What are my legal obligations and what options do I have in relation to my licence?
It is the responsibility of the licence holder to advise the department of the proposed change in ownership, prior to settlement. A 30 day grace period is provided to allow matters relating to the water licence to be arranged. When your property settlement is complete, you no longer have legal access to that property and you are no longer eligible to hold a licence.
Prior to, or within 30 days of settlement, you may apply to:
Note: In situations where you fail to notify the department within 30 days of settlement that you are no longer eligible to hold a licence, we will terminate your licence.
10. I have achieved permanent efficiency improvements (e.g. more efficient crop or better use of technology or infrastructure). Can I trade the water I am now no longer using?
If your water use efficiency improvements can be proved via metering records, you can apply to:
- transfer that portion of your water entitlement to another property that you hold legal access to in that resource subarea, or
- trade, or lease that portion of your water entitlement to another person who holds legal access to land within that water resource subarea.
Note: Each application is subject to assessment by the department and there may be extenuating circumstances (such as the water resource being under stress) that may prevent a water entitlement being transferred or traded.
11. I have subdivided my property; can I transfer my water entitlement to several people?
Yes. You can apply to transfer your water entitlement to several people. A separate application for each transfer will need to be submitted to the department on the relevant application form prior to, or within 30 days of settlement of land sale and, given all relevant criteria are satisfied, separate licenses may be granted.
12. How do I find other licensees within my water resource area that I can trade or lease water with?
The department's 'Water Register' is an online program designed to assist the general public to search licensing and water availability information within the state. This program assists potential water Transferees (Purchaser) looking to buy or lease a water entitlement to locate and contact potential water licensees (Vendors) interested in trading their water allocations.
Alternatively, you can request a report of licence holders within your resource area by submitting a Water licensing data request form to the Department. Please contact your local Department of Water office for further information.
If you are transferrer (vendor) looking for a potential transferee (purchaser), you may also wish to advertise your water entitlement in local papers.
Any application to trade or lease water will be subject to the department's assessment process before any decision on the application can be made.
More information
This FAQ topic deals only with processes and approvals under the Rights in Water and Irrigation Act 1914 refer <www.slp.wa.gov.au>
Other legislation can apply to the activity you wish to undertake and it is your responsibility to ensure you have all the required approvals.
For further related FAQ topics please visit the Department of Water website <www.water.wa.gov.au> Doing business with us – FAQs or contact your local department office.
Checklists are located at the back of each form, please refer to these for assistance when filling out the forms.