For some properties that are available for use by both tenants and non-tenants, the calculation will be on a further 50% proportionate basis. For example, gyms, car spaces etc. However, shops, cafes, restaurants, hairdressers etc will not be considered build-to-rent properties even if they are available for use by both tenants and non-tenants.
Example 1
A build-to-rent property includes a gym, swimming pool and recreation areas. All for the exclusive use of the tenants. The car park includes a few car spaces for visitors/guest of the tenants. The total floor space of the property is 15,000 sq meters. The average land value of the whole property is $3,000,000.
The whole land value will be reduced by 50%.
Land value will be (3,000,000 X 50%) = $1,500,000
Example 2
A build-to-rent property also includes a number of retail shops and a cafe on the ground floor. The concession will not apply to the retail shops and the café. The total floor space of the property is 15,000 sq meters. The total floor area of the shops and café is 1,500 sq meters. The average land value of the whole property is $3,000,000.
Value of 1 sq meter ($3,000,000/15,000) = $200
Total build-to-rent floor space (15,000-1,500) = 13,500
Value of build-to-rent floor space (13,500 X 200) = $2,700,000
Land tax concession of 50% applied ($2,700,000 X 50%) = $1,350,000
Value of other property (1,500 X 200) = $300,000
Total land value after reduction is ( $1,350,000 + $300,000) = $1,650,000
Example 3
A build-to-rent property also includes a gym. The gym is for both tenants and external clients who purchase a gym membership. The gym also has 50 car spaces for gym members and staff. The total floor space of the property is 15,000 sq meters. The total floor area of the gym is 700 sq meters. The total area of the 50 car spaces is 500 sq meters. The average land value of the whole property is $3,000,000.
Value of 1 sq meter ($3,000,000/15,000) = $200
Number of square meters used by non-tenant gym members (700X50%) = 350
Total area of car spaces available for use by non-tenant gym members and staff = 500
Total area of floor space used by non-tenants (350 + 500) =850
Total build-to-rent floor space (15,000 - 850) = 14,150
Value of build-to-rent floor space (14,150 X 200) = $2,830,000
Land tax concession of 50% applied ($2,830,000 X 50%) = $1,415,000
Value of other property (850 X 200) = $170,000
Total land value after reduction is ( $1,415,000 + $170,000) = $1,585,000
Note: If the other property is used non-exclusively by the tenants, then the Chief Commissioner will provide the land tax concession to 50% of that floor space whether or not the space used by non-tenants are more or less than 50%.