Water entitlement transfers, trades and agreements

A licence to take water (groundwater and surface water) is issued under section 5C of the RiWI Act.

A 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 in kilolitres that can be taken each year
• the duration of the licence
• authorised activities
• any terms and conditions and restrictions relating to the taking and use of water.

A water entitlement (water allocation) is the annual quantity in kilolitres (kL), that the licensee is entitled to take under a licence to take water.

There is no guarantee that this volume of water is available and of a suitable quality for the intended use.

A qualified hydrogeologist can provide advice on the availability and suitability of water.

Transfer

A transfer takes place when a licence to take water is permanently transferred to another person and the water will continue to be taken from the same location. For example, subject to an assessment process, a transfer of a water licence could take place if there is a change in property ownership.

Trade

A trade takes place when a water entitlement, or part of an entitlement, is permanently traded to another person and the water will be taken from another location and potentially used for a different purpose.

Trades typically occur in fully allocated water resource areas and must remain within the same resource where new water entitlements are no longer available.

Agreement

An agreement is a form of lease and occurs via the temporary assignment of a licensed water entitlement, or part of an entitlement, by a licence holder to another party. The water may be used at the same or a different location but must remain within the same water resource.

Agreements cannot exceed the term of the original licence and are not a secure water supply because a change in the original licence (e.g. sale of property) could impact water availability.

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).
• Voluntary trading or leasing (an agreement) of water entitlements is an effective means for maximising the benefits of using water to individuals and the broader community. Trading or leasing water allows water entitlements to be distributed amongst landholders in fully allocated resource areas.
• Trading or leasing water entitlements
  • encourages the efficient use of water resources
  • provides opportunities for new water users to access limited resources
  • enables the migration of water resources to uses of higher economic value
  • assigns appropriate value to water entitlements.
• The value of a water entitlement will depend on demand, the location, and the conditions of the licence. We do not set prices, provide information about the value of past transactions, or participate in any market in water entitlements that has been created.
• The Water Register may help identify an existing licensee that you may find to be eligible as a trading partner.
• Trading, transferring and leasing water can provide some monetary benefit to the licensee transferring or trading their entitlement. Stamp duty may apply to water entitlement transactions (see the frequently asked questions - How are water trade values determined? Are there any tax implications associated with these transactions?).
• A licensee may allow access to, or formally lease their land to a third party and allow them to use the licensed water entitlement. In this circumstance there is no obligation to seek our approval of a formal agreement, however an agreement approved by the department would enhance the rights of the third party and provide some protection to the licensee.
• Refer to our Water entitlement transactions for Western Australia policy for more information including
  • how to apply to transact a water entitlement
  • who is eligible
  • our criteria for assessment
  • the role of water allocation plans
  • how environmental issues are addressed
  • how we manage security interests.

Applications for trades, transfers and agreements can be made via Water Online. Note that all parties to the transaction will need to be registered users.

While Water Online is the most efficient way to apply for and manage your licences, applications are also accepted on paper forms. These may be forwarded to your local regional office by post, fax or email. 

View and download our application forms and guides.

Transfer

To transfer the licence to take water to a new owner on the same property, you will need to complete a Form 4T - Application for transfer of licence or entitlement.

Trade

To trade all or part of the water entitlement of a licence to a different person on a different property, you will need to complete a Form 4T - Application for transfer of licence or entitlement.

Agreement

To enter into an agreement to lease a water entitlement for a temporary period of time, not exceeding the duration of the original licence, you will need to seek our approval by completing Form 4A - Application for approval of an agreement.

Note

• A non-refundable fee of $200 applies 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 and Environmental Regulation using the relevant form or online, prior to or within 30 days of property settlement, unless we are notified using a Form 6 - Notification - licensee no longer eligible to hold a licence.
• All applications are subject to our assessment process (refer below).

View and download our application forms and guides.

Each application is assessed on an individual, transparent and equitable basis in accordance with the requirements of the RiWI Act.

For further information go to Stages of assessment for water licences and permits.

In addition to the standard licence assessment process, the following criteria need to be satisfied:

• The original licence document must be returned to us.
• The transferrer of the licence (vendor, original licence holder) must provide us with written approval of all relevant third parties (e.g. agreement holders or security interests).

Note

• We may request the transferee to advertise the potential transfer, trade or agreement if the proposal involves a significant volume of water or is potentially contentious in nature.
• We may undertake an inspection of the licensed property to ensure that the licence conditions are being met.

The value of a transfer, trade or agreement licence is negotiated between the transferor (purchaser) and the transferer (vendor). The financial value (amount paid for the licence) must be stated on the application form submitted to us.

We do not determine water trade values and are 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.

A water licence is dutiable property and the transfer of dutiable property is classified as a dutiable transaction under the Duties Act 2008.

Therefore, the transfer of a water licence, or a water entitlement (e.g. trade) under a licence, may be subject to stamp duty. Stamp duty is not payable on agreements (lease arrangements).

We must not register (grant) the transfer until we receive evidence that the required duty has been paid or is exempt from payment.

An applicant must indicate if the value of the water transaction is included as part of a property sale. If it is, duty is not payable.

If the value of the water is not included as part of a property sale, the applicant must:

• indicate the amount paid (if any) for the water entitlement on Form 4T - Application for transfer of licence or entitlement
• contact the Department of Finance (Revenue WA) to determine if stamp duty is payable, lodging the agreement to purchase the water entitlement (e.g. contract of sale or transfer duty statement) together with a completed copy of Form 4T within two (2) months of making an application to transfer the water licence or entitlement
• provide us with written evidence from the Commissioner of State Revenue that the transaction has been duty endorsed or is exempt from stamp duty.

We may return an application if the applicant has not provided the necessary information.

The Department of Finance may charge penalties if required information is not submitted within the required timeframe. If transfer duty has been paid, but the water entitlement or licence is not granted, you may be eligible for a refund of that duty from Revenue WA.

Find out more from the Department of Finance about lodging and paying transfer duty including the required timeframes.

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, we may issue a Letter of Undertaking. The licence to take water can be issued once proof of legal access to the land has been provided.

For further information refer to our policy Giving an undertaking to grant a water licence or a permit.

Find out if you need a water licence or permit.

If a licence is required:

• check if the property has a current licence or permit by searching the Water Register
• check whether you can apply to transfer the licence into your name or apply for a new licence.

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 this 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.

It is the responsibility of the licence holder to advise us 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:

• transfer the licence to the new landowner on the same property
• trade the entitlement to another party on a different property
• amend your licence for use on a new property you are acquiring in the same resource area.

These applications can be made via the Water Online customer portal. All applications are subject to assessment and approval.

Other options

Delay termination of your licence

If you are not ready to make a decision, you can delay the termination of your licence for up to six months by submitting a Form 6 - Notification - licensee no longer eligible to hold a licence.

Up until this extended termination date, you can still apply to trade your entitlement, transfer or amend your licence, or surrender it to the department.

Surrender your licence

If there is no interest to trade the entitlement, or transfer or amend the licence, you may surrender your water licence to us.

Note: In situations where you fail to notify us within 30 days of settlement that you are no longer eligible to hold a licence, we may terminate your licence.

How to apply

Refer to the frequently asked questions above - 'How do I apply for a water transfer, trade or agreement?' and 'What application forms do I need to complete?'

To amend your licence for use on a new property you are acquiring in the same resource area, complete Form 3G - Application for a groundwater licence or Form 3S - Application for a surface water licence.

Water not being actively used is considered an unused water entitlement.

If your licence is not being actively used, we may look to recoup the portion of the water entitlement that is not being used.

You will be notified and given the opportunity to use or demonstrate how you propose to use your water entitlement before we make a final decision regarding the recouping of all or part of a water entitlement.

Subject to our assessment and approval, an unused water entitlement may be traded in a fully allocated area if the licensee clearly establishes that irrigation efficiency improvements or extenuating circumstance, rather than speculation, have resulted in part or all of the licensed water entitlement not being used.

For more information please refer to our policy Management of unused licensed water entitlements.

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 our assessment and there may be circumstances (such as the water resource being under stress) that may prevent a water entitlement being transferred or traded.

Yes. Subject to the assessment process for trades, transfers and agreements you can apply to transfer your water entitlement to several people. Refer to the frequently asked question above 'How will my application for a water transfer, trade or agreement be assessed?'

You will need to make a separate application for each transfer, prior to, or within 30 days of property settlement.

If you choose to maintain your licence for your own use you will still need to apply to amend your licence to reflect the new property details.

We maintain a register of water licences within Western Australia. We do not act as an agent for the trade or lease of water entitlements.  

If you are a potential transferee (purchaser) of a water entitlement and are looking to buy or lease a water entitlement within your water resource area, our online Water Register can be used to search, view and print licensing and water availability information for a property or area.

Licensees with water available to trade sometimes place newspaper advertisements.

If you are transferor (vendor) looking for a potential transferee (purchaser), you may wish to advertise your water entitlement in local, state or national newspapers.

Any application to trade or lease water will be subject to our assessment process.