What happens to the farm when the kids don't want it?

Usually the parents know long before anyone says it out loud. The kids have careers in Melbourne or Brisbane, partners who didn't grow up on a farm, and children in city schools. They love the place and come home for Christmas and the odd harvest, but none of them is going to run it.

That's not a failure of the family, just a fact the plan has to be built around. The families who handle it well are the ones who say it early.

The quiet answer

The hardest part is usually the conversation, not the paperwork. Parents put it off because asking feels like pressure, and the kids put it off because saying no feels like walking away from everything their parents built. So everyone waits, and the farm keeps running on the assumption that someone will turn up.

It helps to ask the question plainly and take the answer at face value. "We're not coming back to farm" is a clear answer, and in my experience "not yet" usually means the same thing. Planning as though it might change tends to cost years.

Four real options

Once the answer's known, there are really only four shapes, and most families end up with a mix of two.

1. Keep it and lease it. The land stays in the family and someone else farms it. It keeps the asset and the connection, but it turns an operating business into a landlord arrangement, and that has tax consequences, covered below.
2. Keep it with a manager or share-farmer. The family keeps running the business at arm's length. It needs someone trusted on the ground and someone in the family willing to keep an eye on them.
3. Sell part. An outblock, the water, or the country that never quite fitted, sold to fund the parents' retirement and put something of value in the children's hands while the home block stays.
4. Sell it all, on your timing. This one's often treated as failure, and it isn't. A planned sale in a good market is a very different thing from a forced sale after a death in the family.

None of these is right for everyone. The point is to choose one on purpose, while the parents are still here to make the call.

Leasing isn't neutral

Leasing the farm feels like the option that changes least. For tax, it can change a lot.

The small business CGT concessions can make a large difference when farmland is eventually sold, but they depend on the land being an active asset. Land whose main use is earning rent generally isn't, unless it's leased to a connected entity or affiliate that uses it in its own farming business. Lease the whole place to the neighbour for long enough, and relief the family was counting on can quietly slip away.

There's a second trap. If the family stops farming and leases the whole place out, it may no longer be carrying on a business at all, and the concessions then depend on a $6 million net asset test that many farming families won't pass.

Share-farming and other arrangements are treated differently again, and state land tax exemptions for primary production have their own rules. This is one area where the accountant should do the talking (they're far better company on the active asset test than I am). The practical rule is simple: show them the lease before it's signed, not after.

The timing

Capital gains tax on farmland changes on 1 July 2027. The law has passed, with some ATO guidance and supporting detail still to come. From that date the 50% discount is replaced by indexation for inflation and a minimum 30% tax on real gains, for individuals, trusts, and partnerships.

Gains that built up before then keep the discount, with the land's value on 1 July 2027 as the dividing line. Land bought before 20 September 1985 stays exempt for gains up to that date, but growth after it will be taxed for the first time.

For a family that already knows nobody's taking the farm on, that date matters more than it does for most. A proper valuation around then, and a conversation with the accountant about whether selling before or after makes sense, could matter a great deal.

There's more on the change in what to think about before the money moves.

Fair, not equal

When nobody farms, fairness gets simpler in one way and harder in another. Simpler, because there's no single child who needs the whole operation kept intact. Harder, because the question becomes what each child actually wants: a share of the land, a share of the money, or no part in running either.

Some families keep the land in a structure the children own together and others sell and split the proceeds, with plenty landing somewhere in between. Each path carries its own tax, duty, and legal questions, so the solicitor and the accountant belong in the room from the start.

There's more on the fairness side in what happens when the will splits the farm equally.

The parents' years

The decision about the farm and the parents' retirement are two different questions, and they get tangled. If the parents' income depends on the land, every option gets judged on whether it keeps paying them, and that can push a family into holding on longer than makes sense.

Wealth built beside the farm over the years takes that pressure off, because the parents can make the call about the land without it deciding how they live. There's more on building that in off-farm diversification while you still run the farm.

What it means

If you already suspect nobody's coming home, there's no need to act this year. But three questions are worth putting to the whole family while everyone's still around to answer them.

Do the kids want the land, the money, or neither? How do the parents want to live once they stop? And what would the family want to have done before 1 July 2027?

The answers usually point to one of the four options, and choosing it early is what turns a hard sentence into a plan.

For the families who built Australia.