Quick answer
An agricultural land loan is finance secured over farming land, assessed on a specialist rural valuation, the land's zoning and water, and your ability to repay from farm or off-farm income. Bare land usually gets tougher treatment than a farm with improvements and a trading history. A clear income plan and a deposit or equity position make the biggest difference.
Key points
- Lenders lend against the valuer's figure, not the contract price, and farmland valuers look at productive capacity, water, access and zoning before they look at what the neighbour sold for.
- Bare land has no buildings or trading history to lean on, so the repayment story has to come from your plan and your other income.
- Water is legally separate from the title in much of Australia, so check what entitlement actually transfers before you sign.
- Farmland sales have thinned out while prices have held, which means fewer comparable sales for valuers to use and more room for a valuation to land below the price.
An agricultural land loan is finance secured over farming land. The lender looks at three things: what a specialist valuer says the land is worth, what the zoning and water mean for how it can be used, and whether you can repay from the farm, from other income, or both. Bare land is judged more cautiously than a working farm, because there are no buildings, no trading history and no income yet. A well-built plan and a clear deposit position are what move the answer.
Here’s how that plays out in practice, and what to have ready before you make an offer.
How do lenders assess agricultural land?
Lenders don’t lend against the price on the contract. They lend against the valuation, and for farmland that usually means a valuer who works in rural property. That person is reading the land, not the market chatter: soil and productive capacity, rainfall or irrigation, water entitlements, fencing, access, and what the zoning allows.
Then the lender turns to you. Can the repayments be met from the land once it’s producing, from off-farm income, or from the rest of your business? How much of your own money or equity is going in? Do you have farming experience, or a manager or family member who does?
The security and the borrower get assessed separately, and a weak spot in one can be covered by strength in the other. Good land with thin income may work with more equity behind it. A strong income with awkward land may work with a lower loan amount.
Why is bare land harder to finance than a working farm?
A working farm tells the lender a story. There are shearing sheds, yards, a house, a trading history and tax returns showing what the place earns. If something goes wrong, the property can be sold as a going concern.
Bare land has none of that. It is harder to value because there are fewer features to compare. It has no income of its own yet, and it can take longer to sell if the lender ever has to. Lenders price that uncertainty by asking for more of your own money in, a tighter loan-to-value position, and more detail on how you’ll bring the land into production.
That doesn’t make bare land unfinanceable. It means the file has to do more talking. A one-page farm plan, a realistic timeline to first income and evidence of other funding all help. (If you want to see how the loan-to-value position is worked out, our guide to what LVR means covers it.)
What are the market numbers telling buyers right now?
Prices are high and sales are thin. A major agribusiness bank’s 2026 farmland report put the national median at $10,516 a hectare for 2025, up 2.8 per cent, the slowest growth in a 12-year run. Another bank’s research expects national prices to rise by around 2 per cent in 2026, and flags that interest rate rises could add pressure.
The more useful number for a borrower is volume. ABARES data shows farmland transactions falling from 4,445 in 2021 to 2,258 in 2024. Fewer sales means a valuer has fewer close comparisons to lean on. If the land you’re buying is unusual, or the nearest comparable sale was a different size or soil type, the valuation can come in below the price you’ve agreed. That’s the gap you cover with your own money, so find out early how big it might be.
One more caution from the bank indices themselves: they are market snapshots, not valuations. A regional median tells you nothing about the particular paddock you’re buying.
What should you check before you sign?
These are the checks that most often change a lender’s answer. Do them before you commit, not after.
- Zoning and overlays. Confirm the planning zone with the local council and look for flood or bushfire overlays. Land close to a town may look like it has subdivision potential, but lenders usually value it for what it can do as farmland.
- Water. In much of Australia, water entitlements are separate from the land title. A title can transfer with no water attached at all. Ask your solicitor exactly what entitlement transfers, whether it’s allocated or only licensed, and what it adds to the value.
- Access and services. Legal road access, easements and power matter to a valuer. A paddock with no registered access can be difficult to finance.
- Land use classification. Check how the land is rated and classified by the state valuer-general or council, because that can affect rates, tax concessions and how a lender sees the property.
- Title and encumbrances. A title search shows registered interests, covenants and any existing mortgage. Our guide to getting a property title search walks through it.
- Stamp duty. Some states offer concessions for primary production land. Check your state revenue office before you budget.
How much deposit will you need, and can equity help?
There’s no universal figure, and anyone quoting one without seeing the land is guessing. What is consistent is that lenders want more skin in the game on land than on a house, and more again on bare land.
Many buyers don’t pay the deposit in cash. They use equity in a property they already own, which can reduce the cash needed at settlement. A farm second mortgage over existing property is one way to cross-fund the gap, and some buyers combine that with a main loan over the new land. The trade-off is that more of your property is now tied up as security, so the structure needs to make sense if a season goes badly.
Government help exists for some buyers. The Regional Investment Corporation’s farm loans are aimed at eligible farm businesses, and its AgriStarter loan targets first-time farm buyers. Check eligibility on the RIC website, because most buyers expanding an existing operation will need other lenders.
If you already have a block in mind and want a second opinion on how a lender will read it, check your options here before you go to contract.
What does a worked example look like?
Say a mixed farmer, call them Sam, wants to buy 120 hectares of unimproved land next to their existing place. The contract price looks reasonable, but there are no sheds, one dam and a licence for a small water allocation.
The lender’s valuer comes in below the price, because the nearest sales were smaller blocks with better access. Sam’s existing farm has plenty of equity but the main lender won’t increase its limit. Sam’s partner has a steady wage from off the farm.
A structure that might work: a loan secured over the new land at a conservative loan-to-value position, topped up by a smaller facility secured against equity in Sam’s existing property, with the partner’s income documented to support repayments while the new land is brought into production. Not every lender will accept that combination, which is exactly why where you apply matters. Many bank credit teams will say no to the whole package, while a rural-savvy non-bank or private lender may read each piece on its merits.
What if you’ve been declined?
Ask what the objection was. It usually falls into one of four buckets: the valuation, the income, the amount of equity, or the structure. The first two sometimes need a different lender; the last two can often be fixed by restructuring the deal.
Declines also leave marks. Each full application may trigger a credit enquiry, so applying everywhere in a hurry can make a bad month worse. Our guide to why you shouldn’t apply for loans everywhere explains why a targeted approach is better.
What documents help the application?
- Contract of sale or letter of offer, plus a title search.
- Two years of tax returns and notices of assessment for each borrower, or alternatives if you’re self-employed.
- A recent asset and liability summary, including any existing farm debt.
- A simple farm plan: what you’ll grow or run, expected timeline to income, and who is doing the work.
- Evidence of any off-farm income.
- Water entitlement details and any planning certificate.
Our buying a farm finance checklist has the full run-through, and what lenders look for in farm valuations explains what the valuer is thinking when they walk the boundary.
Ready to look at finance for your land purchase?
If you’re after an agricultural land loan, you’re in the right corner of the market. We arrange rural finance for buyers the main banks find hard to place, and we’re happy to look at bare land, part-improved blocks and working farms alike. Our rural land loans and farm purchase loans pages show the kind of deals we handle, and rural property loans and off-farm income farm loans cover the common variations.
The enquiry takes about a minute, and your credit file isn’t touched just for asking. We don’t pass your details around a pile of lenders. A real person reads your situation and calls you to talk it through. Please fill the form in as accurately as you can, so we can point you to the right option first time.
Frequently asked questions
How do I get a loan to buy agricultural land in Australia?
Start with a specialist rural valuation or at least a clear idea of what the land is worth, then line up your deposit or equity, income evidence and a simple farm budget. A lender assesses the land as security and you as the borrower. Banks, non-banks and private lenders each draw the line in a different place, so it helps to approach them with a complete file rather than a cold enquiry.
Is it harder to finance bare agricultural land than a working farm?
Usually, yes. A working farm has buildings, a trading history and often existing income a lender can read. Bare land is harder to value, harder to sell in a hurry if things go wrong, and has no income of its own yet. Expect a lower loan-to-value position, more questions about your plan and a bigger role for off-farm income or equity in other property.
How much deposit do I need for farmland?
It depends on the lender, the type of land and your overall position, so there's no single number worth quoting. Many buyers bring part of the deposit as cash and part as equity in other property they own. A second mortgage over existing property can sometimes bridge the gap. A broker can map the realistic range for your situation before you commit to a contract.
Does zoning affect an agricultural land loan?
Yes. Zoning controls what you can do on the land and how a valuer and lender treat it. Rural, farming and rural living zones are read differently, and land close to a town may carry development potential that a lender will not count as value. Check the planning zone and any overlays, such as flood or bushfire, before you offer.
Do water rights matter when financing farmland?
They can matter a great deal. In many parts of Australia water entitlements are separate from the land title, so a title can transfer with little or no water attached. A lender and valuer want to know what entitlement you're really buying, whether it transfers, and what it adds to value. Get your solicitor to confirm this before exchange.
Can I use off-farm income to buy agricultural land?
Often, yes. Wages, a business or investment income can support repayments, particularly when the land will take time to earn. Lenders will want to see that the farm side is realistic and that the off-farm income is stable and well documented. Our off-farm income farm loans page explains how that works.
What if the bank says no to the land purchase?
A decline from one lender isn't the end of the road. Non-bank and private lenders assess rural security differently, and a structure such as cross-securing existing property or staging the purchase can change the answer. Ask what the specific objection was, because it tells you whether to fix the file or change lender.