Primary Production Land Exemptions

Land tax is a tax on the total value of land you own, or have an interest in, as at midnight 31 December each year.

There are a number of land tax exemptions, including an exemption for land used for primary production purposes.

What is this exemption?

This exemption applies to land where the dominant use is primary production, for the purpose of selling the produce.

The exemption may apply regardless of whether the owner is carrying on the activity, e.g. lessee farming the land, or sharecropping.

Primary production means land where the dominant use is:

  • maintaining animals for the purpose of selling them, their natural increase or their bodily produce

  • cultivating crops for the purpose of selling the produce

  • keeping bees for the purpose of selling the honey

  • growing flowers, orchids or mushrooms for the purpose of sale

  • commercial fishing and commercial farming of fish and other seafood

  • commercial plant nursery, but not including a nursery where the principal cultivation is maintaining plants pending their sale to the public.

Classification of the land as rural and non-rural

The determination of the exemption is dependent upon the classification of the land. Land is rural land if it is zoned rural, rural residential or non-urban under a planning instrument.

If the land is zoned rural

Land that is rural land is exempt if the dominant use of the land is for primary production.

If the land is zoned non-rural

Land that is not rural land must demonstrate that the dominant use of the land is for the business of primary production and you must show:

  • that the primary production has a significant commercial purpose or character

  • that the size or scale of the activities are large enough to be considered a business, not just a hobby

  • the activities are carried on with the intention of making a profit, regardless of whether or not a profit is made.

Note: Although the relevant period used for determining whether or not land is used for primary production is the taxing date, the use of the land in a short period before and after the taxing date and preparation of the land is also considered, especially if land is currently fallow in the normal cycle of land management or if drought conditions exist. Details should be provided to enable consideration of your claim.

What should you do?

Landowners, who think that they are eligible, should apply for the exemption by completing the primary production land application form and returning the form to us. Once we receive your completed application, we will review your case to see if a primary production exemption applies. We may request additional information from the owner or the entity undertaking the primary production activity in order to assist in determining if the claim for the exemption is granted.

This may include, but is not limited to:

  • financial records
  • National Livestock Identification Scheme information
  • returns or evidence lodged with relevant authorities
  • evidence of sales or expenditure
  • a plan of the property.

If you disagree with the decision made on your exemption claim, you have a right to object to the decision.

Interest and penalties

Lodging your registration form after the due date or not lodging a form at all is considered a tax default and interest may be charged.

Under the Taxation Administration Act 1996, we may impose penalties for providing misleading and/or false information, or for deliberately avoiding our requests for information.

False claims

There are substantial penalties for knowingly making false or misleading statements in connection with an application for exemption. We conduct investigations and compliance checks to ensure that exemptions are only granted to those clients who are entitled to receive them.

We are able to obtain information from the ATO. Under reciprocal power arrangements, information may be disclosed by the ATO for the purposes of land tax administration.

For more information on land tax, contact us.

Phone
1300 139 816*
8.30am - 5.00pm Monday to Friday
Mail
GPO Box 4269
SYDNEY NSW 2001
Email

Last updated: 23 March 2017