Hobby farms, or lifestyle blocks, are generally considered by banks to be non-income-earning rural properties, but that vanilla definition doesn’t tell the full story.
Every hobby farm is different, depending on what crops you’re planning on growing, the animals you’re looking to raise and, ultimately, the work you’re willing to put into it.
With recent estimates of 60,000 “small lifestyle blocks” currently operating, it’s a growing national passion worth considering, no matter your stage of life.
What Is A Hobby Farm?
The main reason people buy a hobby farm is less about raising livestock and working the land and more about lifestyle. That being said, there can be plenty of hard work involved.
Most hobby farms can be anywhere from 10-100 hectares, with the block itself usually consisting of a property for you and your family to live on and a lot of land acreage to do whatever you want with as long as it meets council building codes and you’re not breaking the law.
If the bank determines that you may be using the hobby farm as your sole source of income, you’ll need to apply for a commercial loan instead and go through another credit department with stricter lending requirements.
In saying that, it is possible to earn a little money by selling things like eggs and vegetables at the market. Don’t expect to live like a king with such a small-scale enterprise: running a successful farm is tough.
For example, you could have a cow, a horse for riding, a few chickens and some vegetables for a sustainable lifestyle. Strictly speaking, hobby farms are not for the purpose of turning a profit. It’s why land plots of 100 hectares or more may not be considered for a hobby farm loan.
When you search for viable real estate, you’ll notice that some hobby farms will be set up with existing farming amenities like horse stables, food troughs for pigs, sheep and chickens, and sheds and barns. What you do with these structures is up to you, though.
In fact, many budding lifestyle farmers tend to favour smaller blocks (20 hectares) within driving distance of a major town or capital city.
You may currently live the typical ‘home in the suburbs, work in the city’ lifestyle and just want a piece of bushland or open space to escape. It’s like having your ‘home among the gumtrees’ but still having easy access to basic services like shops, schools and hospitals.
There’s a bit of luck involved in finding lifestyle farms near regional cities, though, because they’re generally in high demand.
Who’s Buying Hobby Farms?
As mentioned above, lifestyle blocks aren’t just for retirees. You’ll need to get used to some of the work involved and the rhythms of the changing seasons.
So while professionals are reaching retirement and wanting to put some man-hours into a hobby farm, many Australians just want to add some spark to their work/life balance.
There are three categories of people looking to buy hobby farms:
- Retirees who want privacy, have time on their hands and dream of working on acreage.
- Families who want space and to give their kids an experience of living on the land for a more natural lifestyle.
- Urban dwellers who want to maintain small farms in rural areas close to major cities so they can keep their regular jobs in town.
People buy hobby farms to enjoy themselves so remember why you’re buying one in the first place. Buyers don’t expect financial gain from these properties, even if they do sell a little excess produce.
You may not want to overcommit yourself with too many animals or crops that you haven’t quite got your head around managing effectively yet. For example, many people try their hand at caring for miniature breeds of cows before even considering caring for larger cattle because they’re a lot easier – and cheaper – to manage.
Are There Different Types Of Hobby Farms?
A hobby farm doesn’t have to be the archetypal farm with livestock and crops.
Perhaps you’re a wine-lover and want to try your hand at your own boutique vineyard, or is coffee more your thing?
Others get a hobby farm to keep and ride horses on the weekends instead of paying rent for a stable, or they simply want somewhere to tinker with machines and cars.
Lifestyle farming can also include:
- Farming free-range eggs.
- Producing honey.
- Cheesemaking.
What Legal Requirements Are There?
It’s important that you understand the legal obligations of owning a hobby farm.
They’re not as comprehensive as running a commercial farm, but there are few requirements that do crossover into hobby farming.
Tax Considerations
Regarding tax considerations for your farm, one of the most important factors is whether your activities can be considered a hobby or a primary production business.
You can enjoy the activity without having to report it if it’s a hobby. You don’t need to declare any profit from the activity, but you can’t claim any deductions. Also, without an ABN, you will need to fill out a form and provide a written statement to the payer; otherwise, the highest tax rate will be withheld.
Suppose your hobby farm is turned into a primary production business. In that case, you must register for an ABN, report your income to the ATO, and maintain tax records. Unless you’re offsetting a loss against other income, you must pass the ATO’s “non-commercial loss” standards or postpone your loss until you generate a profit; you can claim business deductions for your expenses. You can also benefit from tax concessions offered to primary producers, such as tax offsets and deductions, as well as the new quick asset write-off for SMEs of up to $30,000.
Are Lifestyle Blocks Expensive?
Like a standard residential property, the location and size of the land will determine the price.
Generally, the more rural the hobby farm, the less it will cost, and the closer it is to a major city or town, the more it will cost. The reason is that the market is a lot smaller for rural properties: it’s basic supply and demand.
Of course, as mentioned previously, opting for a more rural location means you’ll have to forgo the luxury of proximity to shopping centres, schools and hospitals.
In terms of the size of the hobby farm, again, you have to really think about what you’re trying to achieve: do you just want a piece of land to enjoy with your family, friends, a few dogs and a horse, or are you looking to grow some crops and raise livestock?
This question will dictate how much land you really need and how much you’ll need to spend on upkeep.
Are They Expensive To Maintain?
A lifestyle block isn’t a “set and forget” weekend or holiday getaway. If you want that, then a holiday home is probably a better option for you.
Costs can include:
- Disease prevention and vet visits.
- Ongoing overheads like feed, drenching, tagging and identification processes.
- Set-up costs including machinery and care of livestock.
- Upkeep of the property itself if it’s old.
Even if you’re not planning on owning a lot of animals or growing produce on your hobby farm, the upkeep of the land takes time and money, especially if it needs work to bring it back up to a fertile standard.
What Should I Look For In A Hobby Farm?
Anyone considering buying a hobby farm needs to be clear about what they want their property for before even looking at real estate classifieds. What you are willing to commit to in terms of work hours and the costs involved need to factor heavily into your decision.
Buying land and then changing it to suit your purpose takes time and money, so it’s often better to choose a lifestyle block that is more suited to your wants and needs.
Keeping Animals
Look for:
- Horse stables and other types of housing for animals such as chicken coops and pens for cows, sheep, goats, alpacas and llamas.
- Appropriate fencing (this is also a legal requirement for fences that back onto public roads).
- Access to water from natural sources such as ponds or lakes.
- Adequate pasture for grazing livestock and poultry.
- Adequate shade for the spring and summer months. This can be as simple as having a few appropriately-sized trees but can also include portable or fixed shade shelters.
The Land
Make sure the hobby farm has access to:
- Water from natural sources for irrigation.
- Good, flat land with quality soil (it’s recommended you organise for a soil test from an appropriately licenced specialist before committing to the purchase).
Buildings
Apart from the property itself, do a thorough inspection of sheds, fences, tracks, drains, yards, water pumps, water supply (including tanks, dams, pipes, bores and troughs) and power supply (location, single and three-phase).
Not only should you ensure they are of a high/workable standard, but you should also ensure that they’ve been council approved. Existing infrastructure should be clearly marked on the first page of the Contract of Sale for the hobby farm. Getting a qualified conveyancer is essential.
Extra Features
These features aren’t essential, but they will add to the enjoyment of owning a hobby farm:
- Bushland and tracks for riding horses.
- Creeks for fishing and recreation.
- Rolling hills for all-terrain vehicles (ATVs) like quad bikes.
Duty Of Care For Livestock
The duty of care codes fall under the Animal Care and Protection Act 2001 and pertain to the requirements of owners to provide for an animal’s food, water and living needs, including protection from predators (which is wear appropriate fencing comes into play) and euthanasia.
Although these codes vary from state to state, they apply to all types of animals that you have on your hobby farm.
In relation to care and food, water troughs should be fixed in position and must allow easy access for multiple animals at once. It’s also essential to make sure that stocks are familiar with watering points (especially the young).
Access to, and ensuring that your animals know where shade is located on your hobby farm is important as well.
Hobby farms that have a few trees (such as gumtrees) with good foliage coverage are great, but you can also construct your own shelter using shade cloth, corrugated iron or timber. Beware of animals all huddling in the one spot when there are other shade sources available.
Signs of heat stress include:
- Arching backs.
- Panting, slobbering or showing excessive salivation.
- Foaming at the mouth.
- Open-mouthed breathing.
- Lack of coordination and trembling.
The duty of care codes mentioned above are voluntary, but adherence to these requirements can provide defense against animal cruelty charges.
There are specific guidelines and tips for caring for cattle, goats, honey bees, horses, pigs, poultry, rabbits, sheep and non-indigenous animals like camels, bison, water buffalo and llamas. The NSW Department of Primary Industries’ Agriculture agency has great resources and tips if you’re planning on keeping any of these types of animals on your hobby farm.
Another important thing to keep in mind is the National Livestock Identification System (NLIS), Australia’s scheme for the identification, tracking and tagging of animals used in primary industries like agriculture and farming.
As the owner of a hobby farm, you’ll also have to adhere to these requirements. You can find out more information about the NLIS here.
Other questions you may want to consider when researching hobby farms are:
- How far is the farm from a vet?
- Will you be willing to get your hands dirty when livestock give birth as well as the feeding and vaccinating that comes with newborns?
- How long will dam water last?
- Will you be available to get to your hobby farm when the time calls? The repair of broken fences and gates and situations where an animal is sick or injured are all your responsibility.
You can find more great information on animal care at Animal Health Australia (AHA) and the Australian Animal Welfare Strategy (AAWS).
Biosecurity And Land Care
Under Australia’s national Environment Protection and Biodiversity Conservation Act 1999, hobby farmers undertaking new farm activities should be aware of:
- Nationally threatened and migratory species.
- Nationally threatened ecological communities.
- Wetlands of international importance.
- World and national heritage properties.
So if you’re planning to undertake major changes to the land like land clearing, check first by calling the Department of the Environment on 1800 110 395. They also have a map letting you know whether matters of national environmental significance are likely to occur in the area in which your hobby farm is located.
While these are factors are in the national interest, there are also so-called biosecurity factors to consider when you own a hobby farm.
Biosecurity is about keeping people, animals and plants/crops free from noxious weeds, pests and disease.
It plays an important role not only on your farm but in the prevention of disease outbreaks. Biosecurity measures don’t necessarily have to be expensive either.
Some simple things you can do include:
- Requesting a Commodity Vendor Declaration (CVD) when purchasing feed for animals and plants.
- Ensuring feed doesn’t contain a high ratio of weed seeds that could propagate on the property.
- Keeping food in a clean, dry storage area on your hobby farm to avoid pests.
- Cleaning food and water troughs regularly to avoid contamination.
- Not feeding restricted animal material (RAM) to ruminants like cows. Engaging in this practice is illegal in Australia because it is linked to the spread of bovine spongiform encephalopathy (BSE or ‘Mad Cow’ disease).
- Source certified seed and propagation material. Only purchase plant material from sources that take biosecurity, hygiene, health testing and record-keeping seriously.
- Ensure that animal manure and green waste is aged and thoroughly composted to destroy the weed seeds and diseases that often come with organic fertiliser.
- Always follow the instructions when using chemicals, paying particular attention to dilution and application rates, expiry dates and the proper disposal of chemical residue. You can find more information on this on the Australian Pesticides and Veterinary Medicines Authority website.
- Erecting a fence to keep livestock out of creeks and rivers that run through your property to improve water quality. You’ll also keep the neighbours’ water supply, and the local environment, clean.
Yes, you have to keep the hobby farm free from weeds and pests, but there are right ways to do it and wrong ways. It’s recommended that you speak to an agronomist before you undertake such work.
Bushfire Prevention
Properly placed fuel breaks on your hobby farm are a great way to stop the spread of low-intensity fires or fires in their early development. It also allows better access to volunteer firefighters and other emergency authorities to undertake firefighting activities.
Seasonal fuel reduction is highly recommended by all Australian fire authorities. You can create a ‘zone of protection’ on your hobby farm by:
- Having livestock graze selected areas.
- Ploughing and harrowing vegetation.
- Slashing or mowing vegetation is also helpful as long as the clippings are removed and allowed to rot down before fire season.
Keeping clear space between your property and surrounding bushland is important, but it’s also important to take a measured approach to fallen timber since it’s considered to be an important part of your hobby farm’s ecosystem.
If fallen timber presents a fire threat, relocating the timber away from the fire threat to ‘fallen timber lots’ helps maintain a balanced environment.
There are many other things you can to reduce bushfire risk, including:
- Providing good access to fire trucks, i.e. bridges and cattle grids that you have on your property may not be able to carry the weight of a fire truck.
- Ensuring proper storage of petrol, diesel, oil and other types of flammable material.
- Having basic firefighting equipment like pumps, hoses and fire extinguishers that are ready to use and in close proximity to your paddock.
- Trimming branches away from power lines.
- Locating “refuge paddocks” so your stock can be moved there during fires.
Check with your relevant state government authority or the local council for more tips and guidelines on managing fire risk on your hobby farm. The NSW Rural Fire Service provides a great resource.
Zoning And Council Restrictions
Zoning changes all of the time, so it’s something to be keenly aware. Although the following names and classifications vary slightly from state to state, lifestyle blocks generally fall under rural residential, rural conservation zone or farming zone.
- Rural residential zone: It’s a lot easier to get approved for a hobby farm loan, but there is significant emphasis given to the protection of residential amenity. A permit is required to build a dwelling in this zone if the land size is less than 8 hectares which, in the case of rural residential land, is often the case. You’ll also require a permit to undertake agricultural work. Use of animals for farming purposes or husbandry is also prohibited in this zone.
- Rural conservation zone: These are areas of environmental significance. Agriculture is permitted, but it has to be consistent with the environmental and landscape values of the area. A single dwelling is allowed on your hobby farm, but animal boarding and significant husbandry are not permitted.
- Farming zones: The specific purpose of this zoning is to ensure that non-agricultural uses, particularly dwellings, do not adversely affect the use of land for agriculture. Because of this, you’ll need a permit to build a dwelling for land that is less than 40 hectares. On top of that, getting approved for a lifestyle block loan can be difficult.
For specific restrictions, it’s essential you speak to the local council.
Also, check out the postcode calculator to get a pretty accurate idea for lending policies and restrictions for the particular area that you’re looking to buy a hobby farm.
The important thing to keep in mind with rural properties is that you might not only have remote access to public services like schools and hospitals, but even basic things like electricity, a phone line, gas and water and sewerage pipes may need to be installed on the property.
It’s really important to consider what you can live with and what you can live without on the hobby farm. Can some of these services be installed at a low cost?
Because of the size of the block, chances are there may be easements or rights of way through your property. This can affect the types of activities you can undertake on parts of your property as well as your plans for building structures like sheds and barns.
Tips On Soil Management And Growing Crops
Soil Management
If you’re planning on using the hobby farm to grow crops or even to provide good grazing to livestock, organise for a soil test to check that the farm isn’t contaminated agricultural land (CAL) before committing to the purchase.
Check with your state’s equivalent Department of Primary Industries because they should offer soil sampling kits. These sample kits are usually canisters in which you place a soil sample from the hobby farm and then mail off to their department’s laboratory.
The laboratory will come back with results on the level of:
- Organic matter.
- Phosphorus.
- Potassium.
- Calcium.
- Nitrogen.
- Magnesium.
- Sodium.
- Potential hydrogen (pH).
Once you’re satisfied with the tests and you’ve purchased the hobby farm, the next thing to do is soil cultivation.
This may have already been undertaken by the previous owners but, if it hasn’t, soil cultivation basically means the ploughing, tilling, digging and hoeing of the soil. There are a number of machines that can help you with this process, but there are manual methods as well if you’re willing to put in the time and effort.
The soil should be tilled to a good depth and at even texture near the surface. This provides optimum aeration and drainage for the roots of the fruit and vegetables you’re planning on growing on the hobby farm.
The loosening or tilling of the soil, however, is only part of the cultivation process: there’s a nurturing aspect as well.
Fertilising
Fresh compost is an excellent fertiliser and will also help you reach an optimal nitrogen level. After regular application in the early stages of soil cultivation, you should be able to maintain your soil’s health and fertility by doing little more than proper composting, crop rotation, and cover cropping.
There are many different types of compost mix you can use on your hobby farm, from manure to bone meal mixed with phosphate rock and horn meal. Green manure is probably the best way to improve the quality of your soil, but it really depends on the current level of your soil’s health: a quick, strong remedy is sometimes needed to make the soil fertile again.
Other things to keep an eye on are the pH levels of the soil. Basically, this involves the application of certain fertilisers and nutrients to balance out the acidity and alkalinity of the soil. Too much of either can hinder plant growth on the hobby farm.
You find out more about soil management on the NSW Department of Primary Industries website.
Irrigation And Water Quality
A really big tip is to have an irrigation plan that suits the region of Australia your hobby farm is located. This is particularly important if you’re planning to be away from the property for large parts of the season.
Are you on a floodplain? This can have massive implications for your irrigation plans, but hobby farms located in flood zones are difficult security to get approved for a loan.
For more information on rainfall, check out the Australian Government National Water Commission website offers rains charts and maps as well as the Bureau of Meteorology.
Be aware of the effects of soil erosion and sediment runoff on water quality. This can actually cause phosphorous to get into your hobby farm’s dams and streams, resulting in water contamination, affecting plant life as well as the livestock that drink the water.
Similarly, excessive use of fertilisers has the potential to cause a blue-green or general algal outbreak in your water supply. To help avoid this, minimise the amount of time that soil remains exposed to wind and water, use cover crops between crops and plant dense vegetation as a buffer in steep locations to catch runoff.
It’s recommended you seek objective advice from your district agronomist and horticulturist if you don’t have much experience in soil health and growing crops. What may be good for the topography and weather patterns of one region may not be good for another.
Do I Need Special Insurance To Buy A Lifestyle Block?
Since you’re not running a business from your hobby farm, a standard home insurance policy will likely be enough to cover your basic needs, but you should speak to your mortgage broker and possibly a financial adviser on what type of insurance is right for your needs.
If the farm produces some form of income, has assets such as mechanical tools and vehicles, and has livestock and crops, there may be a requirement for you to have business or hobby farm insurance to protect equipment against damage and public liabilities.
Get Advice And Speak To Farmers In The Area
Just like buying a residential property, most people start their research online. Use this page as a guide and do some more research on what to look for in a hobby farm, specifically, what type of hobby farm you’re looking to start and what you want to achieve by buying one.
Speak with local real estate agents about the area and about similarly successful small hobby farms nearby.
If you can, speak with the locals because they’ll give you really objective answers rather than a sales spin. This way, you can make a much more informed decision on whether property and location are right for you.
Attend small farm expos, open days and speak to vets about what’s involved in rearing certain livestock and land management on your hobby farm.
Each state has its own farmers’ association which you can check out for resources and guides:
- NSW Farmers.
- Victorian Farmers Federation.
- Queensland Farmers’ Federation.
- Tasmanian Farmers & Graziers Association.
- South Australian No-Till Farmers Association.
- NT Farmers.
- WA Farmers.
If you’re seriously thinking about buying a hobby farm or lifestyle block, check out the hobby farm loan page for tips on getting approved for finance.
Better yet, complete our free assessment form or call us on 1300 889 743 and one of our mortgage brokers will get back to you and let you know how we can help. We’re hobby farm loan specialists.