Related Companies

A company is considered to be a related company if 2 or more companies are commonly owned or controlled. A related company can be assessed separately or assessed jointly with another company or companies to which it is related under the related companies (grouping) provisions in section 29 of the Land Tax Management Act 1956.

The effect of these provisions is that the total tax payable on the land owned by the group is equal to the tax that would be payable if a single company owned all of the land. In assessing land tax, each member of the group will be assessed as either a concessional, joint concessional or non-concessional company.

Definitions

Concessional company: The company in the group that receives the benefit of the general threshold or premium rate threshold.

Joint concessional companies: Two or more companies in the group that are assessed together to receive the benefit of the general threshold or premium rate threshold.

Non-concessional companies: A company in the group that is not entitled to the benefit of a threshold.

General threshold: The general land tax threshold for 2017 is $549,000. If the land value exceeds this threshold, $100 land tax is payable plus 1.6% per dollar above the threshold up to a taxable value of $3,357,000.

Premium rate threshold: The premium land tax threshold is $3,357,000. Above this amount, the tax rate increases from 1.6% to 2% for each dollar.

Assessment of liability

Land tax for related companies is assessed as follows:

  1. Where the total taxable land value for the group does not exceed $549,000: No tax is payable by the group.

  2. Where the total taxable land value for the group exceeds $549,000 but does not exceed $ 3,357,000:

    • one company with a taxable land value exceeding $549,000 will be assessed with the benefit of the general threshold

    • if no company of the group meets this criteria, 2 or more companies that do will be jointly assessed and will receive the benefit of the general threshold. This could result in the entire group being assessed as joint concessional companies

    • any remaining group members will be assessed at 1.6% on their taxable land value and will not receive the benefit of the general threshold.

  3. Where the total taxable land value for the group exceeds $3,357,000:

    • one company with a taxable land value exceeding the premium threshold of $3,357,000 will be assessed with the benefit of the general threshold and will pay $100 plus 1.6% up to the premium threshold and then 2% thereafter

    • if no company of the group exceeds the $3,357,000 threshold then 2 or more of the companies will be jointly assessed and will receive the benefit of the general threshold. This could result in the entire group being assessed as joint concessional companies

    • any remaining group members will be assessed at 2% on their total taxable land value. These companies will not receive the benefit of the general threshold.

For more information on land tax, contact us.

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1300 139 816*
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Mail
GPO Box 4269
SYDNEY NSW 2001
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Last updated: 23 March 2017