Each State has a different land threshold value before tax is payable. Each State also has different rules regarding the land tax treatment for Trusts. Land tax is an ongoing obligation and so it is an important tax which may require clarification.
Land Tax Registration/Variation
You may be required to lodge a land tax registration form, or a land tax variation form, if any of the following events have taken place:
Purchased an initial investment property;
Purchased additional investment properties;
Sold an investment property;
You have a holiday home; or
If your circumstances have changed, for example you have begun renting out your existing principal place of residence.
Land tax is not applied to your principal place of residence if you are living in the property. The due date for land tax varies from state to state, so we suggest that you refer below to ascertain whether you are required to register for land tax or lodge a land tax variation form. Land tax is applied to the land component only of any property.
You can either click into the various States websites to lodge your own land tax returns or you can ask your Client Manager to do this for you. In summary, the State regulations are as follows, but you should ensure you understand the full impact of land tax as it may apply to you or your related entities as the summary below is not an exhaustive analysis.
New South Wales
Land tax is not applicable to your principal place of residence (PPOR). Land tax payable in New South Wales is determined on the taxable value of landholdings as at 31 December each year.
The threshold below which no tax payable is $412,000 for natural persons and companies. Above $412,000 land tax is $100 +1.6% on the value above $412,000, up to the premium threshold.
The premium land tax threshold for the 2014 land tax year was $2,519,000. At this threshold the rate is $33,812 for the first $2,519,000. Then 2% over that.
For land held in Victoria it is not necessary to lodge any Land Tax form as the State Revenue Office of Victoria will automatically send out an assessment, but if you have not received an assessment and you fall into an applicable category please contact your Client Manager as land tax is ultimately self assessed and the onus is on the taxpayer.
Land tax liability in Victoria is determined by applying the rates to the taxpayer's portfolio of land held at 31 December each year.
Land tax is payable at the ordinary rates where the unimproved value of a taxpayer's landholdings in Victoria exceeds $250,000. For trusts with aggregate property holdings above $25,000 a land tax surcharge of 0.375% on the ordinary rate of land tax applies. Some trust exclusions do apply, so please refer to the website above or your Client Manager for further information.
The Victorian State Revenue Office website states "The payment period for land tax assessments is 37 weeks (subject to certain conditions). If your assessment is greater than $200 you can choose to pay in full within 19 weeks or in four instalments over a 37-week period. If you have chosen the instalment option, you must pay each instalment by the due date to remain on the instalment program."
Land tax in Queensland is levied on the aggregate of the unimproved value of all freehold land owned in Queensland as at midnight on 30 June each year. The threshold which no tax is payable is up to $599,000 for natural persons. For companies, trusts and absentees the threshold which no tax is payable is up to $349,999. Various rates of tax apply to amounts above the threshold.
Land ownership, site value and land use as at midnight 30 June each year is used to determine the land tax for the forthcoming financial year. Land tax revenue assists in the provision of public services such as education, health and public safety.
Land tax in Tasmania is assessed on the aggregate assessed value of the land held by the owner as at 1 July each year. The threshold below which no tax is payable is $25,000. Various rates of tax apply to amounts above the threshold.
According to the Tasmanian State Government Land Tax information sheet, "Your account is payable by the due date. Payment options are explained on the land tax demand."
Land tax in Western Australia is assessed on the basis of the unimproved value of land holdings as at 30 June each year. The tax threshold for the 2014 land tax year is $300,000. Land tax is applied at varying rates commencing at 9% per dollar.
The Northern Territory Government at this stage does not impose land tax on land owners.
Please note that the services offered by Chan & Naylor to register for land tax and lodgement of land tax variation requests carry a service charge. You should ask your Client Manager for an approximated price relating to you and your entities for these services.
In some instances when Partnerships, Companies, Trusts and other entities are involved, the land tax obligations can be quite complex.
Australian Capital Territory
Land tax in the Australian Capital Territory (ACT) is assessed on a quarterly basis starting from 15 August for 1st Quarter, 15 November for 2nd Quarter, 15 February for 3rd Quarter and 15 May for 4th Quarter. The land tax rates that apply to residential properties commence at $0 - $75,000 being taxed at 0.60% and increase to 1.80% for land valued at $275,001 and above.