Exemption – Land Used and Occupied Primarily for a Boarding House

Section 10Q Land Tax Management Act 1956

Preamble

1. Where land is used primarily as a boarding house, an exemption from land tax or a reduction in the taxable land value of the land is available if the land is primarily used to provide boarding house accommodation in accordance with guidelines approved by the Treasurer.
2. The purpose of this ruling is to outline the approved guidelines applying to the 2025 land tax year, and to explain the conditions that entitle the owner to claim an exemption or a reduction in the taxable land value. A declaration must be completed each year by owners who wish to claim the concession. This can be done online at  www.revenue.nsw.gov.au/help-centre/online-services.

Guidelines approved by the Treasurer

3. Land used as a NSW boarding house is exempt from land tax for the 2025 land tax year if the following criteria are met:
   1. Land that is used as the site of a boarding house is exempt from land tax for the whole of 2025 if:
      1. the land was used as a boarding house for the whole or part of the 2024 calendar year (called the "preceding year"); and
      2. in respect of at least 80% of the total accommodation that was actually occupied during the period of operation as a boarding house in 2024:
         1. the occupants were long term residents (as defined); and
         2. the maximum tariffs charged were no more than the tariff limits specified or calculated in accordance with paragraph 4 for that year; and
      3. the owner agrees that, in respect of at least 80% of the accommodation that will be occupied in 2025:
         1. the occupants will be long term residents; and
         2. the maximum tariffs charged will be no more than the tariff limits calculated in accordance with paragraph 5 for that year.
4. The maximum tariffs charged for accommodation during 2024 must not have exceeded:
   1. for full board and lodging:
      1. $453 per week for single accommodation; or
      2. $747 per week for family or shared accommodation;
   2. for less than full board and lodging:
      1. $305 per week for single accommodation; or
      2. $502 per week for family or shared accommodation.
5. The maximum tariffs that may be charged during 2025 must not exceed:
   1. for full board and lodging:
      1. $467 per week for single accommodation; or
      2. $770 per week for family or shared accommodation;
   2. for less than full board and lodging:
      1. $315 per week for single accommodation; or
      2. $518 per week for family or shared accommodation.
6. For the purposes of these guidelines:

"Bed nights" has the meaning given in the definition of "Total accommodation actually occupied".

"Boarding house" means premises which:

1. are registered under the Boarding Houses Act 2012 as either a general boarding house or an assisted boarding house; and
2. are used and occupied by 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
3. are not premises which are licensed under the Liquor Act 2007; and
4. are not used and occupied by persons who are subject to a Residential Tenancy Agreement under the Residential Tenancies Act 2010; and
5. 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 (or a person on behalf of the family or group).

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

"Long term resident" is a boarder or lodger who used and occupied a bed or a room or a suite of rooms for a continuous period of at least 3 months.

"Preceding year" means the calendar year immediately prior to the relevant tax year.

"Room nights" has the meaning given in the definition of "Total accommodation actually occupied".

"Relevant tax year" means the specific land tax year to which the guidelines are being applied to determine if the land qualifies for exemption or a reduction in taxable value.

"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 (or a person on behalf of that person).

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

"Tariff" means the cost of a room or bed as well as electricity, water and other charges, excluding Commonwealth GST.

"Total accommodation actually occupied" means the total number of "bed nights" in respect of all beds separately let during the relevant calendar year, plus the aggregate of all "room nights" for rooms or suites of rooms separately let during the relevant calendar year, where:

1. "bed nights" for each bed separately let means the number of nights in the relevant calendar year for which that bed was separately let; and
2. "room nights" for each room or suite of rooms separately let for single or family accommodation is the number of nights during the relevant calendar year for which the room or suite of rooms was separately let for single or family accommodation."

7. For the purposes of paragraph (ii) of the definition of "boarding house", 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

8. To qualify as full board and lodging the operator must provide at least two main meals each day.  A ‘meal’ means the provision of prepared food at set hours of the day.

9. If a security deposit is required, the amount of the deposit cannot exceed two weeks of occupancy fees, as specified by the Boarding House Act 2012.
10. If only part of the land or only part of the premises is used for a boarding house, a pro rata reduction in the land value of the land will be calculated.  A partial exemption may apply if part of a building has a separate use to that of a boarding house (eg a shop or a café).  If the premises consist of 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.
11. Owners must apply for exemption by completing the declaration online at www.revenue.nsw.gov.au by 31 March 2025 or within 30 days after receiving a notice of assessment which includes the land.
12. Records of owners who claim concessions are regularly audited by Revenue NSW. Documentary evidence supporting the information supplied in the declaration must be retained and produced for inspection if requested.  Any identified tax avoidance scheme may result in the imposition of interest and penalty tax, in addition to the amount of tax avoided (Part 10A Taxation Administration Act 1996).