Exemption: land used and occupied primarily for a boarding house – 2013 tax year

Section 10Q Land Tax Management Act 1956

Preamble

1. Where land is used and occupied primarily as a boarding house, an exemption from land tax or a reduction in the land value of the land is available if guidelines approved by the Treasurer are met.

2. The purpose of this ruling is to outline the approved guidelines applying to the 2013 tax year, to explain the conditions that entitle the owner to claim an exemption or a reduction in the land value and to provide a declaration to be completed by owners who claim the concession.

Guidelines Approved by the Treasurer

3. The guidelines under which a NSW boarding house is exempt from land tax for the 2013 tax year are as follows:

   1. Land anywhere in NSW that is used as the site of a boarding-house will be entitled to an exemption from land tax for the 2013 tax year if, during the whole of the year ended 31 December 2012, in respect of at least 80% of the accommodation available to boarding house residents:

      1. occupation was by long term residents (as defined); and

      2. where full board and lodging was provided, the maximum tariff charged per room was no more than¹:

         $332 per week for single accommodation; or

         $552 per week for family or shared accommodation;

         or where less than full board and lodging was provided, the maximum tariff charged per room was no more than²:

         $221 per week for single accommodation; or

         $368 per week for family or shared accommodation.

   2. Where the requirements of paragraph 3(i) above were not met because the land was used as a boarding house for only part of the 2012 calendar year, the land will qualify for exemption if:

      1. at least 80% of the accommodation that was actually occupied during the period of operation as a boarding house in 2012 was occupied by long term residents; and

      2. at least 80% of the accommodation available to boarding-house residents during the period of operation as a boarding house in 2012 was either occupied or was available for occupation at tariffs within the limits shown in paragraph 3(i).

   3. The owner must provide a statutory declaration stating that, in respect of at least 80% of the accommodation available to boarding house residents, the tariff for each room for full board and lodging during the whole of 2013, will not exceed³:

      $341 per week for single accommodation or

      $566 per week for family or shared accommodation

      or where less than full board and lodging is provided, the tariff for each room will not exceed⁴:

      $227 per week for single accommodation or

      $378 per week for family or shared accommodation.

4. For the purposes of these guidelines,

   "boarding house" means premises which:

   1. are used in the course of conducting a business of letting rooms to boarders or lodgers; and

   2. contain at least 3 separate rooms or suites of rooms which are available for letting; and

   3. are used and occupied by at least three (3) long term residents who:

      1. are not members of the family of the owner or manager; or

      2. are not directors or shareholders or members of the family of a director or a shareholder of a company if the company is the owner; and

   4. are not premises which are licensed under the Liquor Act 2007; and

   5. are not used and occupied by persons who are subject to a Residential Tenancy Agreement under the Residential Tenancies Act 2010; and

   6. are not premises used as a backpacker’s hostel, serviced apartment or tourist accommodation.

   “Family or shared accommodation” means a room or suite of rooms jointly used and occupied by a family or a group of persons under one agreement between the owner or operator of the boarding house and the family or group.

   “Family” includes a couple, whether or not married to each other.

   “Long term resident” is a boarder or lodger who, during 2012, uses and occupies a room or a bed for a period of at least 3 consecutive months or for periods which total at least 3 months.

   “Room” means an area of a boarding house surrounded by 4 walls, with or without windows, containing 1 or more beds.

   “Single accommodation” means a bed or a room used and occupied solely by one person under an agreement between the owner or operator of the boarding house and the person.

   “Suite of rooms” means 2 or more rooms let to a family or a group of persons under a single agreement between the owner or operator of the boarding house and the family or group.

5. For the purposes of paragraph 4(iii) above, a member of the family of the owner or manager or a member of the family of a director or shareholder means a person who may be entitled under the Succession Act 2006 to an inheritance should the owner, manager, director or shareholder die intestate.

Ruling

6. If only part of the land or only part of the premises were used for a boarding-house, a pro rata reduction in the land value of the land will be calculated. If the premises are a single building, the reduction in land value is to be made on a floor area basis. Otherwise the reduction is to be made using the ratio of the land area used and occupied as a boarding house to the total area of the land.

7. Owners must apply for exemption by completing part A and either part B or C of the standard declaration. The application should be lodged as soon as possible but within 30 days after receiving a notice of assessment which includes the land, by posting to the Chief Commissioner at the following address:

   Office Of State Revenue
   Client Services Division
   GPO Box 4042
   Sydney NSW 2001

   or, alternatively, the application may be lodged at any branch of the Office of State Revenue from where additional copies of all forms are available.

8. Records of owners who claim concessions are regularly audited by the Office of State Revenue. Documentary evidence supporting the information in parts A, B or C of the declaration must be retained and produced for inspection, if requested.

Footnotes

1. ^ Tariff rates do not include GST.
2. ^ Tariff rates do not include GST.
3. ^ Tariff rates do not include GST.
4. ^ Tariff rates do not include GST.