Australia Wants a 30% Minimum Tax on Farm Tourism Income While Crops Stay Exempt. The Lesson for Every Farmer Starting a Visitor Business Anywhere
Late last month, in a Senate estimates hearing in Canberra, Nationals leader Matt Canavan asked farm department officials a simple question.
A farmer owns a harvester. He uses it on his own crop. Then he takes it next door and does contract harvesting for the neighbours. Under the government's new trust tax, how do you split that one machine?
The officials could not give him a clear answer.
That is the whole story of agritourism income tax in one tractor. In Australia, the US, Canada and the UK, money from crops and livestock is usually treated as farming income. Money from visitors (farm stays, tours, weddings, events, admissions) is often treated as a different kind of income, with different rules, different forms and sometimes a different tax bill. Set up your visitor side correctly from day one and you avoid most of the pain.
The Short Answer: Is agritourism income farm income? Often, no. Most tax systems define "farming" narrowly: growing crops and raising animals. Farm stays, tours, events and admission tickets are usually classed as business, property or "non-primary production" income. Australia's proposed 30% minimum tax on discretionary trust income, planned to start on 1 July 2028 if Parliament passes it, would exempt primary production income, but farm tourism income is likely to fall outside that exemption. The lesson for farmers everywhere: keep visitor income separate, recorded and reviewed by a qualified adviser before your first paying guest. This is general information, not tax advice. |
What Just Happened in Australia
On 4 November 2026, FarmOnline's national rural affairs writer Jason Gregory reported what came out of that estimates hearing. It should worry any farm family that has added visitors, venues or contracting to the business.
Here are the facts, kept plain.
The federal government wants a minimum 30% tax on certain income of discretionary trusts. Many Australian farms are run through family trusts. Primary production income would be exempt.
But according to the report, many farm trusts also earn money from property rentals, contracting, tourism and renewable energy. That income may not be covered by the exemption.
The scale is bigger than most people think. Data revealed at estimates, matching ATO figures for 2023-24 that the National Farmers' Federation cited to Treasury, showed that about one in three of Australia's 37,663 agricultural trusts reported some non-primary production income. These activities made up about 19% of the business income reported by agricultural trusts.
The officials also admitted some uncomfortable things.
No. 1: Nobody has costed it. The Department of Agriculture, Fisheries and Forestry had not calculated what restructuring would cost farmers, or how many producers would be affected.
No. 2: Restructuring has a hidden trap. DAFF deputy secretary Chris Toyne confirmed that a farm business that moved its whole primary production operation out of a trust and into a company could lose access to Farm Management Deposits. FMDs are the tax-smart savings accounts farmers use to ride out bad years. FarmOnline's headline calls it a A$6.3 billion scheme, and the department's own statistics show primary producers held A$7.04 billion across 43,613 FMD accounts at 30 June 2026.
No. 3: Stamp duty is someone else's problem. Moving land between entities can trigger state stamp duty. Toyne said that is a matter for the states and territories, and the department had not discussed relief with them.
No. 4: The harvester question has no clean answer yet. Canavan's example is the one every mixed farm will face: one asset, two kinds of income.
Then came the line that matters most for readers of this site. Opposition agriculture spokesman Darren Chester, quoted in the same report, pointed out that the government has encouraged farmers to diversify into things like energy infrastructure, a farm stay or a wedding venue. "But that income isn't covered by the exemption," he said.
Read that again if you run, or plan to run, a farm stay.
What the government says it will do to help
The proposal includes a three-year "rollover" window. It is meant to let families restructure without an immediate tax hit. The government has also proposed partial rollovers that separate non-primary production assets from an existing discretionary trust while the farming side stays put.
Treasury's draft law also offers an opt-out election for trusts that already exist on 1 July 2028, if they lock in fixed shares for a list of nominated beneficiaries. That election is one-off and strict. Break it and the trustee can be taxed on all of the trust's net income at the top marginal rate, plus the Medicare levy, for that year.
There is one more detail that farm landlords should note. Tax advisers at PwC point out that the exemption uses the existing legal meaning of "taxable primary production income". Rent or agistment fees from simply holding farmland are not covered.
Get the dates right
Some reports, including the 4 November FarmOnline story, say the tax starts on 1 July next year, which would be 2027. That is not right for the tax itself.
The Budget on 12 May 2026, Treasury's draft law released on 3 September 2026 and the Treasurer's own media release on 14 October 2026 all say the minimum tax would apply from 1 July 2028, the 2028-29 income year. The restructure window runs from 1 July 2027 to 30 June 2030. The 2027 date in some reports may come from that window, which opens on 1 July 2027.
And it is not law yet. The Bills went into Federal Parliament on 14 October 2026 and were referred to a Senate committee the next day, with its report due on 13 November 2026. Accounting firm Grant Thornton reported that the Opposition is not expected to support them, so the government needs the Greens in the Senate, and the Greens have raised concerns. So the final shape could still change.
Why Your Crop Money and Your Visitor Money Are Not the Same Money
Here is the part most farmers never get told.
Tax systems were built for farms that grew things and sold them. So the law defines farming by what you do with plants and animals, not by where the money is earned.
The UK tax manual defines farming as "the occupation of land wholly or mainly for the purposes of husbandry". Australia's tax office lists plant and animal cultivation, fishing and tree farming. Canada's revenue agency describes farming as raising and harvesting animals or plants in a controlled environment.
None of those definitions say "renting a cabin", "running a corn maze" or "hosting a wedding in the barn".
When a family pays to sleep on your farm, the tax office usually sees accommodation. When a school pays for a tour, it often sees a service or an admission. When a couple books your barn, it sees a venue hire.
That is why the same farm can file two or three different schedules, collect sales tax on some sales but not others, and lose a land concession it assumed was permanent.
It is not a punishment. It is a classification. But a classification you ignore becomes a surprise bill later.
For a full list of questions to take to your accountant, see our deeper checklist, Agritourism and Taxes: Questions to Ask Your Accountant. This article explains the "why" across four countries, so those questions make sense.
Australia: What Counts as Primary Production
The Australian Taxation Office says you are a primary producer if you carry on a business of plant or animal cultivation, fishing or pearling, or tree farming or felling. Activities better described as a hobby or recreation do not count.
The ATO's main page on this does not mention tourism, venues or farm stays at all. Advisers read that silence the obvious way. BDO, writing on the 2026 Budget, listed eco-tourism, renewable energy and land access income among the things that fall outside primary production income.
That definition already matters today, long before any trust tax.
Field-Tested Play: Ask your accountant to show you, on one page, which of your income lines are "primary production" and which are not. Do it for last year's actual numbers. Most families have never seen their farm split this way. |
The concessions that depend on that line
Income averaging. Primary producers can average their income over up to five years, so a bumper year is not taxed like a lottery win. Non-primary production income under A$5,000 is included in the averaging calculation. Between A$5,000 and A$10,000 it shades out. At A$10,000 or more, none of it is included.
Farm Management Deposits. Only individuals can hold an FMD, including trust beneficiaries and partners. Companies cannot. You must be running a primary production business when you deposit, your taxable non-primary production income must be no more than A$100,000 for that year, and the total of all your FMD balances cannot exceed A$800,000.
Think about that A$100,000 cap. A successful farm stay or wedding venue paid to you personally can push you over it. In that year you cannot make a deductible FMD deposit, even though the farm itself is doing exactly what it always did.
Non-commercial loss rules. If the farm runs at a loss, the ATO has a special exception for primary producers whose assessable income from other sources is under A$40,000. Income from an unrelated visitor business could change which side of that line you sit on. That is a question for your adviser, not a guess.
GST. You must register for GST once your GST turnover reaches A$75,000, measured over the current month and the previous 11 months, or projected over the current month and the next 11. You have 21 days to register. A farm that sells grain under contract and also takes holiday bookings has to count both toward that turnover.
What farm groups are asking for
The National Farmers' Federation told Treasury in July that agritourism, renewable energy hosting and infrastructure payments are unlikely to qualify as primary production income. It did not ask to widen the exemption. It asked for partial rollover relief, clear examples of how mixed income will be classified, simple reporting, and attention to state stamp duty.
Earlier this year, at a Senate estimates hearing reported by Queensland Country Life in June, Liberal senator Paul Scarr made the point that these incomes are no longer exotic. He said they "might be non-traditional, but they're actually very usual now".
He is right. We showed in Australian Farmers Call It 'Drought-Proofing' how paying guests carried six family farms through drought. Visitor money is a lifeline. The tax system just has not caught up with it.
Reality Check: Do not rush to restructure because of a headline. BDO told clients in June not to make immediate structural changes until the rules are clear and passed. The proposed window would not open until 1 July 2027. Use the time to get your records clean, so that when you do decide, your adviser is working with real numbers. |
United States: Schedule F, Schedule C and the County Assessor
In the US, the split shows up on the federal tax return itself.
Farm income goes on Schedule F. Rural Tax Education, a national extension program funded through USDA, puts it simply: gift shops, restaurants, event hosting and amusement rides are "generally not considered farming". Those usually go on Schedule C as ordinary business income. Reselling other people's products and processing beyond the raw state are not farming either.
The grey zone is U-pick. Selling your own berries or pumpkins to visitors who pick them is listed under farming activities, but the extension specialists flag it as a more complicated case. If you also charge admission or add activities, ask your adviser how to report each part.
Why the schedule matters
Both schedules feed self-employment tax. If you have US$400 or more of net self-employment earnings, you pay it, at a combined rate of 15.3%.
But the schedule matters for other reasons.
The March 1 rule. Farmers whose farming income is at least two-thirds of their total gross income can skip quarterly estimated tax payments if they file and pay by March 1. Grow the visitor side on Schedule C fast enough and you may drop below two-thirds, and the normal estimated-payment rules apply.
The hobby trap. An activity is presumed to be a business if it made a profit in 3 of the last 5 years (2 of 7 for horse activities). Missing that test does not make you a hobby, but it invites a closer look. Hobby income is still taxed, but hobby expenses generally cannot be deducted, and Utah State University's rural tax program says the 2025 tax law made that permanent. A new venture can file IRS Form 5213 to postpone the determination. The best defence is the boring one: a separate bank account, a business plan, and records showing you are trying to make money.
Sales tax. Sales of farm products are often exempt from state sales tax. Admission tickets are a different story in many states. Tennessee's Department of Revenue, for example, says charges for hayrides are taxable as an amusement. University of Tennessee Extension guidance for farmers (last revised in 2014) says sales tax is generally due on admissions to attractions such as corn mazes too, and that a pumpkin sold with a hayride for one price can make the whole amount taxable. Price them separately and the farm product can stay exempt.
The property tax shock
This is where some US farmers have been hurt hard.
Many states tax farmland at a lower agricultural or "current use" value. The extension guidance notes that Schedule C activities are often not eligible for those rates, though agritourism is often allowed as an accessory use. The detail depends entirely on your state and county.
In Snohomish County, Washington, farms that turned barns into regularly booked event spaces were found to no longer qualify for the open space tax rate. According to the Snohomish County Tribune in February 2025, eight farms received tax bills in a first wave the previous summer. Removal triggered seven years of back taxes plus a 20% penalty. The county farm bureau president said she had talked with more than 20 farms that got letters, and understood some bills topped US$30,000. Owners had 30 days to pay before the amount became a lien on the property.
Corn mazes, U-pick and pumpkin patches did not trigger the letters. Converted buildings did.
State Representative Sam Low put it plainly: "A majority of farms, from my perspective, are not doing anything incorrect."
Washington lawmakers responded. Substitute House Bill 1261, signed in April 2025 and effective from 27 July 2025, lets classified farmland host certain agritourism activities, such as educational programs, seasonal festivals and celebratory gatherings, without losing its classification, and cuts the back-tax penalty from seven years to four.
In Kansas, the Z&M Twisted Vines farm winery north of Lawrence, in Leavenworth County, fought the county after it classified 85.2 acres as agricultural but 1.1 acres, including the tasting room and event space, as commercial. The winery lost before the state Board of Tax Appeals in November 2022. "I'm fighting an uphill battle," co-owner Bryan Zesiger told the Kansas Reflector.
Kansas lawmakers then changed the rules. Senate Bill 410, signed in April 2024, counts land incidentally used for agritourism at a registered agritourism location as agricultural land for property tax. Even so, the state revenue department says registration alone does not give a property tax exemption. The owners' wider dispute with the county has since moved into separate lawsuits in federal court.
Two states, two fights, and in both, lawmakers ended up changing the rules. That is why you check your own state before you build. Our Agritourism Laws by State guide and the Florida Amendment 2 story, where agritourism was written into the ballot, show how much the rules vary.
Field-Tested Play: Before you convert a building, call your county assessor's office and ask one question in writing: "If I host paid events or overnight guests in this building, does any part of my parcel lose its agricultural classification?" Keep the reply in your files. |
Canada: Farming Income, Business Income and the Incidental Test
Canada's revenue agency draws the same line, with its own forms.
Farming income goes on form T2042. Other self-employment income goes on form T2125. The CRA's guide gives one example plainly: breeding animals to sell as pets is not farming and belongs on T2125 as business income.
The CRA's technical folio on the meaning of farming is more detailed. Things it lists as not farming include operating a zoo, providing services to farmers, riding lessons and horse boarding, and renting or leasing farm property. Processing harvested produce is usually excluded, unless it is incidental and necessary to make the product saleable.
So where does a farm stay or a pumpkin festival sit? The folio does not name agritourism. Instead it uses a test. A non-farm activity may be treated as part of the farming business if it is related to farming, small in scale, and its income is incidental, meaning subordinate or minor compared with the farm. The CRA also looks at how connected and dependent the two operations are.
In plain words: a small activity tied tightly to your farm may be swept into farming income. A big, independent visitor business usually stands on its own as business income.
Three Canadian traps
GST/HST at C$30,000. You stop being a small supplier when your taxable sales pass C$30,000 in a single calendar quarter or over the last four quarters. Zero-rated farm sales count toward that figure. Many farm products, such as grain and most livestock, are zero-rated, but the CRA lists hotel accommodation as taxable. Ask your adviser how your guest stays and paid activities are treated, because a modest visitor business can push you over the line and mean charging GST/HST.
Restricted farm losses. If farming is not your chief source of income, your deductible farm loss is capped, at a maximum of C$17,500 a year. A strong off-farm or visitor income can affect that assessment.
The farm property exemption. Canada's lifetime capital gains exemption for qualified farm property has use tests. For an individual, one route requires that in at least two years, gross revenue from farming exceeded income from all other sources. Rental and non-farm use of farm property can also complicate eligibility. If retirement or succession depends on that exemption, ask your adviser how visitor income and building conversions will be counted before you start.
Reality Check: None of this means "don't do agritourism in Canada". It means the farm and the visitor side need their own numbers, so your accountant can choose the right form and protect the reliefs your family is counting on. |
United Kingdom: Holiday Lets, VAT, Business Rates and Inheritance Tax
Diversification is now normal on English farms. Defra's Farm Accounts in England show 72% of farm businesses had some diversified activity in 2024/25, earning an average of £31,100 from it. Letting out buildings was the most common activity. Tourist accommodation and catering brought in an average of £8,700 for the farms doing it.
Each of those activities sits outside "farming" for tax in some way.
Income tax. Holiday cottage income is taxed separately from farming profits, as property income, accountants Armstrong Watson explain.
The end of furnished holiday lettings. From 6 April 2025 (1 April 2025 for companies), the special furnished holiday lettings regime was abolished. Holiday let owners lost access to reliefs such as business asset disposal relief and rollover relief, lost the special capital allowances treatment for new spending, and are now limited to basic-rate relief on loan interest like other landlords. Their profits no longer count as relevant earnings for pension contributions.
VAT. The VAT registration threshold has been £90,000 since 1 April 2024. Most food, including most farm produce, is zero-rated. Holiday accommodation is standard-rated, and HMRC's notice confirms that the temporary reduced rate ended on 31 March 2022. So a farm selling lamb and renting out a shepherd's hut is dealing with two different VAT answers on the same land.
Business rates. A farm is exempt from business rates only "to the extent that" it is made up of agricultural land and buildings. The Valuation Office's own manual says leisure uses on a farm that fall outside the agricultural exemption are rateable. One-off events are unlikely to be assessed, but repeated or substantial use is more likely to be. Our post on how a farm shop or café could pay zero business rates shows the reliefs worth asking about.
The 2026 business rates revaluation has put wedding venues in the spotlight. Country Land and Business Association president Gavin Lane warned in February 2026: "This tax could kill the dream of the countryside wedding."
Inheritance tax. This is the one families notice too late. Agricultural Property Relief covers land and buildings occupied for agriculture. Since 6 April 2026, the first £2.5 million of qualifying agricultural and business property gets 100% relief, and 50% above that. A barn converted to a wedding venue or holiday let may no longer count as agricultural. It may still get Business Property Relief, but only if it is a genuine trading business rather than an investment.
That last point has teeth. In HMRC v Pawson (2013), the Upper Tribunal ruled that a furnished holiday let business was mainly one of holding an investment and denied it inheritance tax Business Property Relief, overturning the First-tier Tribunal. Read our farm inheritance tax explainer before you convert anything you intend to pass on.
For more on the planning and legal side of converted barns, see Farm Wedding Venue Zoning.
How Four Tax Systems Treat Farm Visitor Income
Here is the whole picture on one page. It is simplified on purpose. Your facts, your state or province, and the date you read this will all change the details.
Country | Crop income treatment | Visitor income usually treated as | Sales tax / VAT / GST line | One key trap | Question to ask your adviser |
Australia | Primary production income: averaging, FMDs, exempt from proposed trust minimum tax | Non-primary production income (farm stays, tours, venues, rent, agistment from just holding land) | GST registration at A$75,000 turnover | Proposed 30% minimum trust tax from 1 July 2028; FMD cap of A$100,000 non-primary income | "Which of my income lines are primary production, and should the visitor side sit in a separate entity before 2028?" |
United States | Farm income on Schedule F | Often Schedule C business income (events, venues, rides, gift shop, resold goods) | Set by each state; admissions often taxable | Losing agricultural property tax status; hobby loss rules | "Which schedule does each income line go on, and does my county treat events or lodging as non-agricultural use?" |
Canada | Farming income on form T2042 | Usually business income on T2125, unless small and incidental to the farm | GST/HST small supplier line of C$30,000 | Restricted farm losses; qualified farm property tests | "Is my visitor activity incidental to farming or a separate business, and how does it affect my capital gains exemption?" |
United Kingdom | Farming trade; most farm food zero-rated for VAT | Holiday lets as property income; events and attractions often outside the farming trade | VAT registration at £90,000 taxable turnover | Business rates on diversified buildings; loss of APR on converted buildings | "If I convert this building, what happens to VAT, business rates and inheritance tax relief?" |
The Five Surprises That Show Up in Every Country
Look across the four countries and the same five surprises keep appearing.
No. 1: The classification surprise. You assumed it was all farm income. The tax office disagrees. The fix is to classify every income line before you start, not after an audit.
No. 2: The registration surprise. Visitor sales push you over a GST, VAT or sales tax threshold, and you owe tax you never collected from customers. That money comes out of your margin, not theirs.
No. 3: The land surprise. A building or field changes use, and you lose an agricultural rate, exemption or relief. In Washington that meant back taxes. In the UK it can mean business rates now and inheritance tax later.
No. 4: The loss surprise. The new venture loses money in its first years, and you find the loss cannot be used the way you expected, because of hobby rules, non-commercial loss rules or restricted farm loss caps.
No. 5: The structure surprise. You set everything up in one entity because it was easy. Years later, a law change like Australia's makes that structure expensive to unwind, with stamp duty, lost concessions and adviser fees on top.
Every one of those surprises is cheaper to prevent than to fix. That is the real lesson from Canberra.
Three Kinds of Money on One Durian Farm
I am the founder of Bloopy Durians, a durian farm in Bentong, Malaysia.
Durian seasons run roughly from December to February and from June to August.
The farm welcomes visitors from all over the world, who reach it on a four-wheel-drive adventure. Many companies send their staff and management. We supply durians for corporate events. And we have a WhatsApp list of loyal customers who buy whenever durians are available.
That is three different kinds of money: fruit sold to customers, visitor experiences, and supply for events. It helps to see each one on its own line. The farm's legal entity is Bloopy Durians Enterprise.
I will not pretend to give you Malaysian tax advice. Every country, including mine, has its own rules, and you need your own adviser. But I can tell you the habit that travels everywhere: if you cannot see each income stream on its own line, neither can your accountant, and neither can the tax office.
I wrote more about the visitor side in how a 4WD adventure ride brought revenue to Bloopy Durians.
Paperwork From Day One: The Six-Step Setup
You do not need to become a tax expert. You need a system that makes your adviser's job easy and your numbers impossible to argue with.
Here is the six-step setup I recommend before your first paying visitor, in any country.
Step 1: See an adviser before the first booking, not after
Book a meeting with an accountant or tax adviser who works with farms. Take a one-page plan of what you want to offer, rough prices and a guess at first-year bookings.
Ask them to decide three things with you: which entity will receive visitor income, which registrations you need, and how they want your records kept. Our free agritourism business plan template gives you that one-page plan quickly.
Step 2: Open a separate bank account
Every visitor payment goes in. Every visitor cost goes out. No exceptions.
This one habit does more to prove you run a real business, and to stop hobby or non-commercial loss questions, than anything else. It also shows you, month by month, whether the visitor side is actually making money. Our post on why your farm is making money but you still have nothing left explains why that matters.
Field-Tested Play: If your booking platform pays out in one lump sum after taking its fees, record the gross booking, the platform fee and any tax separately. Never record only the net payout. Your adviser needs the gross figure for GST, VAT or sales tax thresholds. |
Step 3: Code every transaction
Set up your bookkeeping with separate categories, at minimum:
Crop and livestock sales (your own produce)
Visitor income (stays, tours, admissions, events)
Bought-in goods resold to visitors
Rent, agistment and contracting
Shared costs (power, insurance, fuel, repairs)
The shared costs are where most arguments start. Agree a fair split method with your adviser, write it down, and use it every year.
Step 4: Keep a mixed-use asset log
This is the Canavan harvester problem, solved with a notebook.
For any asset used both ways, such as a tractor that pulls hay wagons for visitors, a ute that runs guests to the cabin, or a shed that stores grain most of the year and hosts a long-table dinner in autumn, keep a simple log. Date, hours or kilometres, and which activity.
Nobody enjoys it. But when the rules ask "how much of this asset is used for primary production?", you will have an answer instead of a guess.
Step 5: Put it in writing
Visitor businesses run on agreements: booking terms, cancellation rules, liability waivers where they are allowed, venue hire contracts, supply agreements for events. If a family member runs the visitor side, put the arrangement between them and the farm in writing too, including any rent for buildings or land.
Written agreements are what turn "we sort of share it" into something an accountant can classify and a tax office can accept. Start with Legal Essentials for Starting an Agritourism Business.
Step 6: Insure and register before you open
Most farm policies were not written for paying guests. Tell your insurer exactly what you plan to offer, and get the answer in writing. Our guide to agritourism insurance costs and coverage walks through the questions.
Then complete any registrations your adviser identified: GST, VAT or state sales tax, local business licences, lodging taxes. Lodging taxes are spreading, even to rural areas. Nasu, a town in Japan's dairy country, has moved to tax overnight stays, as we covered in Nasu's new lodging tax.
Legal, Insurance and Paperwork: Questions to Ask
I am not your lawyer, accountant or insurance broker. What I can give you is the list of questions that stop expensive surprises. Take it to the right professional.
Questions for your accountant or tax adviser
Should the visitor business sit in the same entity as the farm, or a separate one? What would moving it later cost?
What registration thresholds apply to me (GST, VAT, sales tax, lodging tax), and how close am I?
How will a loss in the first two or three years be treated?
Does visitor income affect any farm-only concession I rely on, such as income averaging, Farm Management Deposits, the March 1 filing rule or a capital gains exemption?
In Australia: if the trust minimum tax passes, what does my trust's mix of income mean for 2028-29, and is the rollover or the opt-out election worth modelling?
Questions for your lawyer
Does my zoning or planning permission allow paid guests, events or overnight stays?
What do my booking terms, waivers and venue contracts need to say in my state, province or country?
If my land is in a trust or partnership, who is allowed to sign contracts for the visitor side?
If I restructure, what stamp duty, transfer tax or land registry costs apply? (In Australia, ask about state duty specifically.)
Questions for your insurer
Does my current policy cover paying visitors, overnight guests and events? Which activities are excluded?
Do I need separate public liability, product liability or event cover?
Does converting a building change my property cover?
Questions for your assessor, council or valuation office
Will any part of my land or buildings lose agricultural classification, exemption or rate if I host paying visitors?
Is there a threshold, such as a share of the land or a number of event days, below which my use stays agricultural?
Write down every answer, with the date and the name of the person who gave it.
Reality Check: An adviser's fee for one planning meeting is usually far less than the cost of fixing a wrong structure, unpaid sales tax, or a reclassified barn years later. Treat it as part of your start-up cost, alongside insurance and signage. |
What Happens Next: My Forecast
These are forecasts, not facts. Treat them as a view of where things seem to be heading.
Australia. I expect the Senate negotiations, with a committee report due on 13 November 2026, to change at least some details before anything passes. Whatever passes, I expect farm families with tourism, venue, contracting or energy income to spend 2027 and 2028 in their accountants' offices deciding whether to split the farm and the visitor side. The ones with clean, separated records will find that conversation quicker and cheaper.
Everywhere else. I expect more tax offices and councils to look harder at mixed farms, simply because more farms are mixed. Diversification is no longer a sideline. In England, nearly three in four farms already do it. In the US, farms and ranches earned US$1.26 billion from agritourism in 2022, according to USDA's Economic Research Service, as covered in our agritourism statistics roundup.
For you. I expect the farms that win the next decade to be the ones that treat the visitor side as a proper business from day one: separate account, separate records, written agreements, an adviser who knows farming. Not because the taxman is the enemy, but because surprises are.
Frequently Asked Questions
Is agritourism income farm income for tax purposes?
Often not. In Australia, the US, Canada and the UK, farming is defined mainly as growing crops and raising animals. Farm stays, tours, events and admissions are usually treated as business, property or non-primary production income. Small activities closely tied to the farm can sometimes be treated as part of farming, for example under Canada's "incidental" test. Ask your adviser to classify each income line.
What is Australia's 30% minimum tax on discretionary trusts?
It is a proposed minimum tax on certain discretionary trust income, planned to apply from 1 July 2028 if Parliament passes the Bills introduced on 14 October 2026. Primary production income would be exempt. Income from farm tourism, rent, contracting and renewable energy is likely to be in scope. A restructuring rollover window is proposed from 1 July 2027 to 30 June 2030.
Do I have to charge GST, VAT or sales tax on farm stays and tours?
Possibly. Australia's GST registration line is A$75,000, Canada's GST/HST small supplier line is C$30,000 and the UK VAT threshold is £90,000. In the UK, holiday accommodation is standard-rated even though most farm food is zero-rated. In the US, sales tax on admissions is set state by state. Check before your first booking.
Can a farm stay or wedding venue change my property tax or business rates?
Yes, in many places. Some US counties have removed agricultural or open space status from land used for regular events, as happened to farms in Snohomish County, Washington, before the state changed the law in 2025. In the UK, diversified buildings can become liable for business rates. Ask your assessor or valuation office in writing.
Should I put my agritourism business in a separate company or trust?
Sometimes it helps and sometimes it costs more than it saves. It depends on your country, your existing structure, liability, succession plans and which farm concessions you rely on. In Australia, moving the whole farm into a company could cost you Farm Management Deposit access. Get advice before you restructure, not after.
How do I split a shared asset, like a tractor used for both crops and hayrides?
Keep a log of dates, hours or kilometres and which activity the asset was used for. Agree a fair split method with your accountant and use it consistently. This is exactly the "harvester question" Australian officials could not answer in Senate estimates, and your records are your best answer.
Does visitor income affect inheritance or succession planning?
It can. In the UK, a building converted from farm use may lose Agricultural Property Relief, and holiday lets have been treated as investments rather than businesses for Business Property Relief. In Canada, farm property tests for the capital gains exemption can be affected by other income and non-farm use. Raise it in your farm succession planning conversations.
Is this article tax advice?
No. It is general information to help you ask better questions. Tax rules change and depend on your exact facts. Speak to a qualified tax adviser in your own country before you act.
Important: General Information Only
This article is general information, not tax, legal, financial or insurance advice. It summarises public sources available on 4 November 2026. Australia's trust tax is a proposal before Parliament and may change. Thresholds and rules in every country change regularly, and they apply differently depending on your structure, your state or province, and your activities. Always check with a qualified adviser in your country before making decisions.
Before You Book Your First Paying Guest
The farms that get hurt are rarely the ones doing anything wrong. They are the ones who never asked the right questions until a letter arrived.
So start with where your farm stands today. Take the free Farm Readiness Quiz. It takes a few minutes and shows which parts of your farm are ready for visitors and which need work first.
If you want help thinking through your own plan, which income streams to start with, how to keep them separate and what to ask your accountant, book a one-on-one consultation with me. We will look at your farm, your goals and your next season, so you walk into your adviser's office prepared.
And if you are still deciding what your visitor side should be, my free ebook 150 Ways to Unlock Hidden Wealth From Your Farm will help. Inside you get 150 income ideas across 10 categories, each with difficulty, start-up cost and earning potential. You get 15 quick wins that cost US$5,000 or less to start, plus a 90-day launch roadmap, a pricing worksheet and a break-even formula, so you can run the numbers before you spend a cent.
P.S. Remember Matt Canavan's harvester, the one machine nobody in Canberra could split? Your farm has one too. Maybe it is a tractor, a shed or a farmhouse kitchen. Start the log this week, before any tax office asks you the question.
By Stephen Loke of AgritourismSuccess.com, whose farm is featured in Bloomberg News and Asahi Shimbun. General information only, not tax, legal or financial advice. Rules change; check with a qualified adviser in your country.
Sources
"Inside the $6.3b farm deposit trap hidden in Labor's trust tax overhaul", Jason Gregory, North Queensland Register / FarmOnline, 4 November 2026. https://www.northqueenslandregister.com.au/story/9385160/federal-government-trust-tax-puts-farm-savings-at-risk/
"'Stark' contrast: how Labor's trust tax rejig will treat diversified farm income", Jason Gregory, Queensland Country Life / FarmOnline, 10 June 2026. https://www.queenslandcountrylife.com.au/story/9278278/labors-trust-tax-sparks-uncertainty-for-diversified-farm-incomes/
"Rent tax: payments between family farm trusts face shock hit under Labor revamp", Jason Gregory, FarmOnline, 16 June 2026. https://www.farmonline.com.au/story/9292023/farming-families-federal-tax-reforms-challenge-rent-exemption/
Media release on the tax reform Bills (minimum tax on discretionary trusts), the Treasurer, Jim Chalmers, 14 October 2026. https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/tax-reform-fairer-tax-system
"2026-27 Federal Budget: Treasury consults on 30% minimum tax on discretionary trusts", PwC Australia, 13 July 2026. https://www.pwc.com.au/tax/tax-alerts/2026-27-federal-budget-treasury-consults-on-30percent-minimum-tax-on-discretionary-trusts.html
"Draft law for the 30% minimum tax on discretionary trusts", PwC Australia, 7 September 2026 (addendum 14 October 2026). https://www.pwc.com.au/tax/tax-alerts/draft-law-for-the-30-percent-minimum-tax-on-discretionary-trusts.html
"Minimum tax on discretionary trusts: the drafts arrive, the questions remain", Sladen Legal, 7 September 2026. https://sladen.com.au/news/2026/9/7/minimum-tax-on-discretionary-trusts-the-drafts-arrive-the-questions-remain
"Minimum tax on discretionary trusts: What the exposure draft means for taxpayers", BDO Australia, September 2026. https://www.bdo.com.au/en-au/insights/tax/articles/minimum-tax-on-discretionary-trusts-what-the-exposure-draft-means-for-taxpayers
"Minimum 30 per cent tax on discretionary trusts: legislation now before Parliament", Grant Thornton Australia, 15 October 2026. https://www.grantthornton.com.au/insights/client-alerts/minimum-30-per-cent-tax-on-discretionary-trusts--legislation-now-before-parliament/
Submission on the Treasury Laws Amendment (Tax Reform No. 3) Bill 2026 to the Senate Economics Legislation Committee (Bill referred 15 October 2026; report due 13 November 2026), The Tax Institute, 29 October 2026. https://www.taxinstitute.com.au/resources/submissions/2026/treasury-laws-amendment-tax-reform-no-3-bill-2026
"What the 2026 Federal Budget means for Australian agribusiness", BDO Australia, 2026. https://www.bdo.com.au/en-au/insights/food-agribusiness/what-the-2026-federal-budget-means-for-australian-agribusiness
NFF Submission: Treasury, Tax of Discretionary Trusts, National Farmers' Federation, 31 July 2026. https://nff.org.au/wp-content/uploads/2026/08/NFF-Submission-_-Treasury-Tax-of-Discretionary-Trusts-31-July-2026.pdf
"Who is a primary producer", Primary producers information 2026, Australian Taxation Office, 30 May 2026. https://www.ato.gov.au/forms-and-instructions/primary-producers-information-2026/who-is-a-primary-producer
"Primary production activities", Australian Taxation Office, updated 22 August 2025. https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/primary-producers/primary-production-activities
"Tax averaging", Australian Taxation Office, updated 22 August 2025. https://www.ato.gov.au/business/primary-producers/managing-varying-income/tax-averaging
"Farm management deposits scheme", Australian Taxation Office, updated 22 August 2025. https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/primary-producers/managing-varying-income/farm-management-deposits-scheme
"Farm Management Deposits statistics, June 2026", Department of Agriculture, Fisheries and Forestry. https://www.agriculture.gov.au/sites/default/files/documents/fmd-stats-jun-2026.pdf
"Non-commercial business losses in primary production", Australian Taxation Office, 30 May 2026. https://www.ato.gov.au/forms-and-instructions/primary-producers-information-2026/non-commercial-business-losses-in-primary-production
"Registering for GST", Australian Taxation Office, updated 14 September 2026. https://www.ato.gov.au/businesses-and-organisations/GST-excise-and-indirect-taxes/GST/registering-for-GST
"Tax Considerations for Agritourism", Rural Tax Education / National Farm Income Tax Extension Committee, hosted by farmers.gov (undated). https://www.farmers.gov/sites/default/files/documents/tax-considerations-agritourism.pdf
"Topic no. 416, Farming and fishing income", Internal Revenue Service, updated 24 September 2026. https://irs.gov/taxtopics/tc416
"Is your hobby a for-profit endeavor?" (FS-2008-23), Internal Revenue Service, June 2008. https://www.irs.gov/node/5731
"Farm losses versus hobby losses", Rural Tax Education, Utah State University Extension, 19 August 2025. https://extension.usu.edu/ruraltax/tax-topics/farm-losses-versus-hobby-losses.php
"SUT-153 Amusement Tax: Hayrides", Tennessee Department of Revenue (undated). https://revenue.support.tn.gov/hc/en-us/articles/360058316392-SUT-153-Amusement-Tax-Hayrides
"Sales Tax in Tennessee on the Purchase and Sale of Farm Products" (PB 1806), Hal Pepper and Rob Holland, Center for Profitable Agriculture, University of Tennessee Extension, revised February 2014. https://utia.tennessee.edu/publications/wp-content/uploads/sites/269/2023/10/PB1806.pdf
"After tax bills hit farms that branched into being venues, lawmakers intervene", Michael Whitney, Snohomish County Tribune, 26 February 2025. https://www.snoho.com/news/2025/feb/26/after-tax-bills-hit-farms-that-branched-into-being-venues-lawmakers-intervene/
"2025 Final Summary of Legislation Passed" (SHB 1261), Washington State Legislature, 2025. https://leg.wa.gov/media/wmzhhidq/2025-final-summary-of-legislation-passed.pdf
Report on the signing of Washington agritourism tax relief bill HB 1261, Lynnwood Times Staff, 23 April 2025. https://lynnwoodtimes.com/2025/04/23/agritourism
"Leavenworth County farm winery blending litigation, politics in bitter property tax dispute", Tim Carpenter, Kansas Reflector via The Lawrence Times, 17 January 2023. https://lawrencekstimes.com/2023/01/17/zm-twisted-tax-dispute/
"New Kansas bill helps farmers across the state" (SB 410 signed 24 April 2024), WIBW, 29 April 2024. https://www.wibw.com/2024/04/29/new-kansas-bill-helps-farmers-across-state
Kansas Agritourism property tax FAQ (K.S.A. 79-1476), Kansas Department of Revenue (undated). https://www.ksrevenue.gov/pdf/KansasAgritourismFAQ.pdf
Zesiger et al v. Leavenworth County, Kansas, No. 2:25-cv-02323, US District Court for the District of Kansas, docket. https://dockets.justia.com/docket/kansas/ksdce/2:2025cv02323/158525
"Farming Income and the AgriStability and AgriInvest Programs Harmonized Guide, Chapter 1", Canada Revenue Agency, modified 17 April 2026. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4408/rc4408-03.html
"Farming Income Harmonized Guide, Chapter 6: Farm losses", Canada Revenue Agency, modified 17 April 2026. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4408/rc4408-09.html
Income Tax Folio S4-F11-C1, "Meaning of Farming and Farming Business", Canada Revenue Agency (reproduced by taxinterpretations.com). https://taxinterpretations.com/node/391984
"When to register for and start charging the GST/HST", Canada Revenue Agency, modified 16 June 2026. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/when-register-charge
"Type of supply" (GST/HST taxable, zero-rated and exempt examples), Canada Revenue Agency. https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/charge-collect-type-supply.html
"Qualified farm property", TaxTips.ca, revised 28 August 2026. https://www.taxtips.ca/smallbusiness/qualified-farm-property.htm
"Farm transition: is your farm offside?", BDO Canada (undated). https://bdo.ca/insights/farm-transition-is-your-farm-offside
"BIM55051: Farming in tax law: definition of farming", HMRC Business Income Manual. https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim55051
"Abolition of the furnished holiday lettings tax regime", HM Revenue & Customs policy paper, 29 July 2024 (updated 7 November 2024). https://www.gov.uk/government/publications/furnished-holiday-lettings-tax-regime-abolition/abolition-of-the-furnished-holiday-lettings-tax-regime
"VAT registration threshold", HM Revenue & Customs policy paper, 7 March 2024. https://www.gov.uk/government/publications/vat-registration-threshold
"Hotels, holiday accommodation and VAT (VAT Notice 709/3)", HM Revenue & Customs, updated 27 October 2026. https://www.gov.uk/guidance/hotels-holiday-accommodation-and-vat-notice-7093
"VAT and diversification: beware the pitfalls", Suzie Horne, Farmers Weekly, 16 June 2024. https://www.fwi.co.uk/business/vat-and-diversification-beware-the-pitfalls
"Tax issues for farmers who diversify into holiday lets", Jonathan York, Armstrong Watson, 20 June 2021. https://www.armstrongwatson.co.uk/news/2021/06/tax-issues-farmers-who-diversify-holiday-lets
"Rating Manual: Farm diversification", HM Revenue & Customs / Valuation Office Agency, updated 21 September 2026. https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/farm-diversification
"CLA says business rates hikes may hit farm wedding diversification", FarmingUK, 6 February 2026. https://www.farminguk.com/news/cla-says-business-rates-hikes-may-hit-farm-wedding-diversification_67971.html
"Farm Accounts in England, Chapter 5: Diversification", Defra, updated 12 May 2026. https://www.gov.uk/government/statistics/farm-accounts-in-england/chapter-5-diversification--2
"Agricultural Property Relief: understanding the impact of recent changes", J.M. Finn, 18 May 2026. https://www.jmfinn.com/our-thinking/agricultural-property-relief-understanding-impact-recent-changes/
"HMRC v Pawson [2013] UKUT 050 (TCC)", ACCA technical summary, February 2013. https://www.accaglobal.com/uk/en/technical-activities/technical-resources-search/2013/february/hmrc-v-pawson.html
"2022 Census of Agriculture: The majority of U.S. counties generate some agritourism income", USDA Economic Research Service, 5 December 2024. https://ers.usda.gov/data-products/charts-of-note/110552
Comments