Exemption for unimproved or partially improved land owned by clubs, associations or societies

Preamble

1. The Land Tax Management Act provides an exemption from land tax where land is owned by or held in trust for a person or society and the land is used as the site for a building occupied by a society, club or association. The exemption is reduced if any part of the building or buildings on the land is used or intended to be used for a commercial activity open to members of the public. Also, the land is not exempt if the society, club or association is carried on for pecuniary profit.
2. Many clubs and societies have an ongoing building program where existing properties are improved or additional properties are acquired for the purpose of expanding existing facilities.
3. There has been some concern as to whether the exemption applies to land which is vacant pending the commencement of a building or which is partially improved due to work being in progress at the taxing date. This Ruling clarifies when the exemption is applicable and when a partial exemption may be given.

Ruling

4. An exemption under Section 10 (l)(g)(iii) of the Land Tax Management Act will be given from the date of commencement of construction of the building provided that the other criteria specified in the Section are met.
5. Where buildings or other improvements have to be demolished as part of the building program to enable a new building to be constructed, the exemption will be granted from the date of commencement of the demolition of those improvements. However, the demolition must be part of a continuous construction program.
6. Where part of the proposed building only is to be used by the club or society, an appropriate proportionate exemption will be granted, based on the proportion of the completed building which is intended to be used by the club.
7. Any variation in occupancy of the building should be notified by way of variation return in subsequent tax years.