This subtopic covers the issues that arise when a legal practitioner is acting for a person who is buying or selling land to which water rights attach or are being included in the sale or purchase of that land. This is separate from the more complex issues that arise when a legal practitioner is acting for a seller or buyer of water (by itself). In this situation, there are additional elements the practitioner may come across, for example the subdivision of the water access licence, and the consolidation of the licence with another already owned water licence by the purchaser. Since this a separate issue from when water access licences/water rights attach to a sale or purchase of the land, it will not be discussed in this subtopic. Rather, the focus will be on water access licences that attach to the sale or purchase of rural land.

The focus of the subtopic is on water rights for New South Wales. However, there are some issues that are relevant to other jurisdictions.

In New South Wales, the right to water was, and in some cases continues to be, governed by the Water Act 1912 (NSW).

The underlying policy of the Water Act 1912 (NSW) was that the owner or occupier of land on which a bore or well was located, or which had a frontage to a stream, was entitled to the benefit of the water subject to any licence conditions which may have attached to the bore, well or stream. The licence passed with the land ownership or occupancy. Except in very limited circumstances, it was not possible to transfer a water licence separately to the transfer of the land on which the licence attached.

With the passing of the Water Management Act 2000 (NSW) in New South Wales and equivalent Acts in other jurisdictions, water has become a tradable commodity, separate from the land. Further, the use of the water and the means by which it is extracted have become separate issues to be dealt with by water users.

See the NSW Office of Water website in the Department of Primary Industries website for more information on converting licences under the Water Act 1912 (NSW) to the Water Management Act 2000 (NSW). Also see the NSW Office of Water website for information on new access licences. New access licences are simply licences under the Water Management Act 2000 (NSW).

There are some interesting issues which arise from the change from licences under the Water Act 1912 (NSW) to licences under the Water Management Act 2000 (NSW). These are:

• The value of the water is not liable to stamp duty on a sale or transfer (exceptions may apply).

• There is no GST on the sale or transfer of water.

• Being a separate commodity, it needs to be dealt with expressly, and it cannot be assumed it will pass with the relevant land.

• Not all water in NSW is currently affected by the Water Management Act 2000 (NSW). There are areas of the state which do not, as yet, fall within a water sharing plan. Those areas are still being developed. See “Water sharing plans under development” on the NSW Office of Water website.

• The right of ownership to the water is a separate entitlement to being able to use the water and the means by which it is removed from the water source.

Key elements in the regime introduced by the Water Management Act 2000 (NSW) are:

• water sharing plans; and

• water access licences.

Water sharing plans establish rules for sharing water between the environmental needs of the river or aquifer and water users, and also between different types of water use such as town supply, rural domestic supply, stock watering, industry and irrigation. See the NSW Office of Water website for details of water sharing plans and how they operate.

These licences differ from licences issued under the Water Act 1912 (NSW). Water access licences:

• identify a clearly defined share of the available water in a particular water source;

• provide a clearly defined entitlement that is separate from land ownership; and

• separate the entitlement to access water from the approvals associated with supply works and the use of water.

See “Water licensing” on the NSW Office of Water website for details of water access licences.

See Water access licences.

Unbundling of water entitlements in Victoria separates the traditional entitlements of water rights in districts, and take and use licences on waterways into a:

• water share: high-reliability and low-reliability where people have had access to sales water;

• delivery share, or extraction share on waterways; and

• water-use licence, or water-use registration for non-irrigators.

Some interest points to note include:

• the value of the water is not dutiable; and

• at this stage, unbundling does not apply to groundwater, unregulated waterways or recycled water.

See the Department of Sustainability and Environment website for more information.

Section 26 of the Water Act 2000 (Qld) vests all rights to the use, flow and control of water in Queensland with the state. A person wishing to take water must be authorised to do so under the Water Act 2000 (Qld). The Department of Natural Resources and Mines (DNRM) manages access to water through a system of water authorisations. This includes:

• water licences: these entitlements attach to land and are for a fixed period of time, usually between 5 and 10 years;

• water allocations: these entitlements do not attach to land, may be used on any land subject to use conditions relating to that land, and are able to be traded; and

• water permits: these are granted for a short period (usually less than one year) for activities with a limited life (for example road construction).

See Water access licences.

In Western Australia, licences of differing descriptions authorise a person to take water under the Rights in Water and Irrigation Act 1914 (WA). See s 5C and Sch 1 cl 2 of the Rights in Water and Irrigation Act 1914 (WA).

Pursuant to Sch 1 cl 29 of the Rights in Water and Irrigation Act 1914 (WA), the holder of a water licence may transfer:

• the licence; or

• the licensee’s water entitlement under the licence,

to a person who holds, or is eligible to hold, a licence of the same kind. Under Sch 1 cl 28 of the Rights in Water and irrigation Act 1914, the licensee’s water entitlement is the quantity of water the licensee is permitted to take under the licence and includes part of the water entitlement.

Schedule 1 cll 25–26 of the Rights in Water and Irrigation Act 1914 (WA) says that, in prescribed circumstances, the Minister for Water may suspend or cancel a licence. Clause 26(4) provides that, generally, before such action is taken, the licensee must be given notice and the opportunity to make written submissions regarding the proposed suspension or cancellation. Those submissions must be taken into account before a final decision is made.

See Water access licences.

Unbundling of water entitlements in South Australia separates the traditional entitlements of water licences into the following:

• water access entitlement;

• water allocation;

• water resource works approval; and

• site use approval.

These are regulated under the Natural Resources Management Act 2004 (SA)

Note that, in South Australia, irrigation rights and entitlements are dealt with under the Irrigation Act 2009 (SA).

See Water access licences.

Under the Water Management Act 1999 (Tas), commercial rights to water are legal property held by the licensee separate from land titles. The sale or lease of rural property does not automatically transfer the water rights.

The Water Management Act 1999 (Tas) abolished all rights existing at common law to the flow of, or for the taking of, naturally occurring water. The Act enables the trading of water access entitlements and water itself.

Water entitlements under the Water Management Act 1999 (Tas) are issued in two types of right:

• A water licence, which is a permit of where and when the licensee may take water.

• A water allocation, which allocates the amount of water that can be taken under a licence and specifies the purpose for which the water is taken.

The Water Resources Division of the Department of Primary Industries, Parks, Water and Environment is the responsible entity for the Water Management Act 1999 (Tas). The department has adopted "Guiding Principles for Water Trading in Tasmania", which outlines the department's policy position under the Act. See the Department of Primary Industries, Parks, Water and Environment website for the principles.

See the Water access licences.

Section 9 of the Water Act (NT) vests all rights to the use, flow and control of water in the Northern Territory. A person wishing to take water must be authorised to do so under the Water Act 1992 (NT). The Department of Land Resource Management administers the Water Act (NT) (see the Administrative Orders) and manages access to water through a system of water licences and permits. This includes:

• water licences: these entitlements are for a fixed period of time, usually not exceeding 10 years, and determine whether there is an allowance to take or use water (including both surface water and ground water);

• drilling and construction licences: these are granted for the construction or enlargement of a bore; and

• waste discharge licences: these are to allow the holder to dispose of waster underground by a bore and are only granted for a period of 12 months.

Note that s 11 of the Water Act (NT) also provides owners or occupiers of land in contact with a waterway a right to take water for certain purposes, such as:

• for domestic use;

• for the drinking by grazing stock; or

• for the purposes of irrigating a garden which is part of the landowner’s land or is used solely in connection to it: s 11 of the Water Act 1992 (NT).

See Water access licences.

The Water Resources Act 2007 (ACT) regulates all water use in the Territory, including dams, streams and groundwater. It covers the:

• allocation of water and licensing to use water;

• licensing of drillers; and

• licensing to construct bores and waterworks (including farms and weirs).

All water in the Territory is vested in the Territory. Under the Water Resources Act 2007 (ACT), in order to use water from one of the sources above, a person is required to have:

• a water access entitlement (WAE); and

• a licence to take water (a WAE is required before a licence can be issued).

A licence to take water is required to extract water under a WAE and states the location from which the water may be taken.

Bores in the ACT should be registered and a licence issued under the Water Resources Act 2007 (ACT). A licence is also required for the construction and allocation of water in respect to dams.

The ACT Environment and Protection Authority (EPA) is responsible for managing water access entitlements and licences, as well as a register containing information on water licences and access entitlements known as the Water Resources Act Register. The register can be searched on the Access Canberra website.

See Water access licences.