Hi everyone,
I would very much appreciate some advice regarding an offer we have put in on a working farm. Our accountant happens to be holidaying in China at the mo (how dare he go away when we need him!!!)
We have put an offer on this working farm through our company – I hope that is the right thing to have done? It is registered as a working farm so no GST is to be paid, pity we can’t get away with paying horrendous WA stamp duty too. Does anyone know of any consequences of our company owning this farm? The farm runs 60 – 80 beef cattle which are sold off every 2 years for about $1,000 – $1,200 per head and cuts 240 bales of hay which sells for $50 – $65 per bale so this farm will give us a nice little income when we retire down there in 2 years.
The other question I wanted to ask is seeing as our company is buying this farm, will our repayments on the loan be able to come straight from our company account rather than from what we draw as wages – hope this makes sense, not used to buying working farms only investment houses.
Thanks for any advice, it is greatly appreciated.
Vyvyen
We have put an offer on this working farm through our company – I hope that is the right thing to have done? Does anyone know of any consequences of our company owning this farm?Vyvyen, all of these are very good questions and should definitely form part of your due diligence prior to an offer being made.
If your offer is accepted by the Vendor, I fear it will be too late to adjust anything and to borrow an apt phrase from the farming community…
“The horse has already bolted.”
Hi Vyvyen,
I’m no expert on structure, so I’m sorry I can’t answer your question. However, I would see purchasing a farm as quite different to what you may be used to – with a farm you are not only purchasing land + infrastructure, but you are also effectively purchasing a business. You need to consider if you want that in retirement. Perhaps consider smaller lifestyle block?
I would suggest running cattle and cutting hay will take much more time (and money) than you expect, especially if you have not done it before. Have you researched prices for those commodities lately? (cattle prices atm are at record highs & industry forecasts say that these levels are not sustainable).
I’m not wanting to put you off, just trying to throw in a dose of realism. All the best.
Fin.
Hi and thank you for the responses. We have been searching for over 2 years for the “dream farm”. We are currently on smaller acerage, but its not enough land for us, the animals keep expanding!
Well I hope we have done the right thing, hubby absolutely loves this farm and the bonus is its only 250m from the ocean.
Don’t need to rely on the farms income but it makes a very nice bonus for us.
Thanks again for the replys.
Cheers
Vyvyen
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