Australia's peak farm body is calling on the Federal Government to safeguard farm businesses by lifting outdated small business Capital Gains Tax (CGT) concession eligibility thresholds as legislation is introduced to Parliament today.
The National Farmers' Federation said farmers across the country were united in their concerns that farm businesses would be unintentionally captured by reforms designed for other sectors.
NFF President Hamish McIntyre said while the NFF's constructive engagement with the Government was ongoing, farmers were yet to receive the certainty they need that family farm businesses would not be caught in the crossfire of broader tax reform.
"We need clear assurance from the Government that it understands the real-world impacts on farm businesses and will work with industry to put appropriate safeguards in place.
"That includes seriously considering long-overdue changes to CGT small business concession thresholds, which no longer reflect the scale or reality of modern farming.
"This is not about special treatment. It is about making sure family farms are not collateral damage in tax reform designed for an entirely different operating environment.
"The Government cannot afford to get this wrong. If these settings are not fit for purpose, we risk decreased investment, delayed succession, increased debt burdens and in some cases, forced sales of farmland to meet the increased tax liability."
The NFF is continuing to call for practical reforms to modernise eligibility for CGT small business concessions, which have remained unchanged since 2007 despite significant changes in farm values and operating costs.
Victorian grain and sheep farmer Ryan Milgate said proposed changes were creating fresh uncertainty for farming families working through intergenerational succession planning.
"When the current thresholds were introduced, our farm would have qualified," Mr Milgate said.
"Since then, land values and the scale of operating a modern farm have changed significantly, even though farming income remains seasonal, unpredictable and heavily impacted by weather and commodity prices.
"People see land value and assume farming families are sitting on huge wealth, but farming doesn't work like that. You can be land-rich and cash-poor at the same time.
"The concern is these changes could force families to delay succession, take on more debt or even sell parts of the farm just to manage the tax impact."
Mr McIntyre said the NFF would continue to work constructively with the Government and had also been in contact with the Coalition, The Greens, One Nation and the crossbench.
"It's so important we get this reform right. The last thing this country should be doing is making it harder for the next generation to stay on the land."
Background
The NFF Members' Council passed a resolution on May 22 calling on the Australian Government to safeguard farm businesses from unintended consequences arising from proposed changes to Capital Gains Tax and their potential impact on intergenerational farm succession.
The NFF has supported some of the proposed tax reforms, including:
- The Government's decision to exempt primary production income from a minimum tax on discretionary trusts is a significant win for the sector given about half of farm businesses use trusts to support succession.
- The Instant Asset Write Off being made permanent.
- Re-introduction of a permanent loss carry back
- While the NFF welcomed the decision to retain the small business CGT concessions to support family farms, the thresholds are badly outdated. The Turnover and Net Asset Value caps were set in 2007 and no longer align with the operational reality of family farms in 2026.
Family farms often represent farmers' life savings, carefully invested in over decades to support their retirement and to provide a succession pathway for their children or grandchildren to enter the sector.
