Consultation closed
Consultation on the reporting of foreign beneficiaries of trusts has now closed.
Background
The NSW Parliament passed the Water Management Amendment (Water Access Licence Register Reform) Act 2024 (the Amendment Act) in October 2024. The reforms enabled by the Amendment Act provide important improvements to the transparency and operation of water markets in NSW. Some of these reforms came into effect on 31 October 2025 and 1 July 2026, with the remaining parts expected to commence in late 2026.
Foreign beneficiary reporting
The Amendment Act will introduce section 87E to the Water Management Act 2000, which will require annual reporting of foreign beneficiaries of trusts that hold or co-hold water access licences. Specifically, this new provision will require trustees to annually report to the Minister for Water the name and contact details of foreign persons who are beneficiaries of the trust. Trustees will be required to provide this information within 2 months after the end of the financial year, commencing 1 July 2027 and annually thereafter.
This reform is intended to improve the transparency of foreign ownership and investment in water entitlements in NSW.
Who is considered a foreign person?
The Amendment Act states that a foreign person has the same meaning as in the Foreign Acquisitions and Takeovers Act 1975 of the Commonwealth, but does not include an Australian citizen, whether or not ordinarily resident in Australia.
Penalties for not meeting reporting requirements
Written notice of foreign beneficiaries must be given to the Minister within 2 months after the end of the financial year. A new penalty offence is proposed in the Water Management (General) Regulation 2025 for a trustee contravening their reporting requirements with a penalty amount of $3,000 for an individual and $6,000 for a corporation.
Publishing information on the NSW Public Water Register
Section 395AA of the Water Management Act 2000 requires that the NSW Public Water Register contain information given to the Minister about foreign beneficiaries under section 87E, without publishing personal information within the meaning of the Privacy and Personal Information Protection Act 1998, Part 6.
Consultation
Some exemptions are proposed for trustees who are unable to provide the information required under the legislation and for trusts that hold small amounts of water that do not reflect significant foreign ownership.
It is important that the regulatory settings can be complied with and are effective in delivering on the parliamentary intent of highlighting significant foreign ownership in water.
Exemptions are proposed for:
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Trustees who do not hold the information required to comply with s87E
The structure of some trust types will mean that some trustees will not hold information on the names, contact details and/or foreign person status of the trust beneficiaries. The proposed exemption will mean that where the relevant information is not held by or available to the trustee, or the trustee is unable to determine if a beneficiary is a foreign person, they will not be required to notify the Minister of that foreign person.
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Trustees that are subject to foreign privacy or information sharing laws
Trustees may be subject to foreign privacy or information sharing laws. An exemption is proposed where reporting of foreign beneficiary information is not permitted under the laws of the foreign jurisdiction of the trustee. Without this exemption, a trustee may be placed in a conflicting situation where they could be required to break a foreign law in order to notify the Minister for Water of the names and contact details of foreign beneficiaries.
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Trusts that hold less than 100ML of water entitlement
A Parliamentary intent of the Amendment Act was to improve the transparency of foreign ownership and investment in water entitlements. Of specific concern was foreign ownership of large amounts of water entitlement, with an ability to influence the operation of the water market.
Some trusts may hold relatively small amounts of licensed entitlement that would not reflect significant foreign ownership of water in NSW. Analysis from the Non-Urban Metering Program identified that works associated with a 100ML and above of entitlement represent 95% of the licensed water take in NSW. The proposed exemption for foreign beneficiary reporting focusses on trusts with water holdings at or above 100ML to capture those most likely to have significant water holdings in NSW.
Feedback on proposed exemptions
The department sought submissions on the proposed exemptions to allow stakeholders to provide feedback on the regulatory settings and their ability comply with the proposed requirements.
Subject to the feedback received, the Water Management (General) Regulation 2025 may be amended to give effect to the exemptions.
Consultation has closed on 6 October 2026.
Contact us
For more information call us on 1300 081 047 or email us at water.enquiries@dcceew.nsw.gov.au