Clearing Sale on the Farm
By Kelly Fragomeli
I recently attended a clearing sale. This one was particularly close to my heart as it was my parents. There had been talk of having a clearing sale for a while, but where to start? A successful clearing sale doesn’t happen by accident. It requires thorough planning and commitment from all involved.
A clearing or reduction sale was invented to either sell off any plant, equipment and other assets after your farmland has been sold or as a happy medium to reduce plant and equipment that has been stored and quite possibly sat untouched for decades.
In the weeks prior to our sale, I went to the farm to help my parents. My Dad started the process by removing everything from the sheds. Once the machinery and other items had been moved out of the sheds it was at that point that I realised the mammoth task ahead.
Standing inside and looking around an empty shed is quite surreal; sheds are designed to house equipment and just outside, laying out on pallets were a variety of items and equipment that reflected our past and my family.
Beginning the preparation of a clearing sale and identifying items to be sold was a lot of hard work. Throw in the emotions for good measure and not only is it physically draining but also emotionally draining. I spent a week working alongside my Dad, I feel incredibly lucky and have memories that I will carry with me for a lifetime.
I consider us small scale farmers so the lot numbers were relative. I can't even begin to imagine the amount of work involved for the larger scale farmers.
The caterer arrived Thursday afternoon to set up. Just before leaving she said, "have a good sleep". I thought that was nice and didn't think much of it. And I did, until my eyes pinged open at 3.30am.
There was not much left to do on sale day (actually there was still plenty to do but you just have to call it). We all had small last minute jobs and mine was putting up flags for the designated parking area.
At 11am the crowd gathered and we were on. I was excited and nervous at the same time. I stood and watched it all unfold before me. It was hot, we were in the middle of a paddock with no shade. The temperature reached 36.6ºC.
I was amazed at what was sold, even random boxes of sundries, which I considered to be junk. Who would have thought that a box of my brother's discarded toys would sell for $10. I did rescue a Matchbox car. I read somewhere that they are a collector's item so thought it might be worth something. Although there is a wheel missing so realistically it's worth nothing, but who wouldn't want this fire truck. (pictured right)
After the auction we assisted people with loading their newly purchased items onto their utes and trailers and as they drove off, I wondered where these items were going. To start a new chapter in someone else's story.
We sold a cast iron claw foot bath with the four feet still intact. I didn't see it leave our farm but the thought that someone will relax in it, placed under a windmill with the best view would be a nice idea. Photos please or this reality doesn't exist… because that reality certainly didn't exist at our farm… the sheep were drinking out of it.
It goes without saying that clearing sales are quite an emotional time. Farmers spend most of their life farming and to watch their much loved and well looked after plant, equipment and items being auctioned off sure does tug at the heart strings and stirs up all sorts of memories. Only you will know when the time is right and it needs to feel right. It's hard to let go.
The best part was looking through our stuff and finding items that reminded me of my childhood. This transported me back to some very special times in my life. And that is priceless.
Now apart from being an emotional and full-on event, there are likely some tax implications worth considering when planning your clearing sale. Any personal items sold will be private in nature and therefore will not need to be classified as income. However, that trusty but rusty tractor that has been sitting in the shed for the past 10 years? When sold, it will most likely need to be assessed as income for the farm much like any other sale. If you are registered for GST it will also mean that you will be required to report GST on the sale of the tractor. It is therefore extremely important to have descriptions and details of all the plant and farming equipment being auctioned as well as how much the plant and equipment sold for. Providing this to your accountant will allow us to have more informed discussions and be able to better plan for your success going forward.
I took away some things that I thought I would share:
Start early, pick a date and start earlier than that. You will be thankful for that extra time.
Take the time to chat with people. I was amazed at how far some had travelled.
Soak up the atmosphere, take photos and have fun.
Enjoy that beer at the end of the day…. You deserve it.
Podcast Episode 7 - A Coffee With Our Newest Partner
In this episode Kym Arnold and Caitlin Davidovic are joined by Carryn Hills who recently became the newest partner at Lincolns. Have a listen and get to know her better! Listen now.