If you bought a new residence and still owned your previous home on 31 December in the last calendar year, you may be eligible for a land tax concession on both properties.To qualify, you need to:
have taken ownership between 1 July and 31 December in the previous calendar year
start living in the new home before 31 December the following year
only use the new property as your principal place of residence, unless tenants occupied the home under an existing lease when you took possession.
Also, you must have been the only residents of your previous property up to 1 July in the previous calendar year and cannot have earned any income from it, except from:
a permitted occupancy
a contract the buyer entered into before settlement as part of the sale eg the property is leased to tenants.
From the 2017 tax year, if you plan to build or renovate, you can claim the concession for four years after you take ownership. If tenants or others occupy the home when you become the owner, you can only claim the concession once they move out.
To qualify:
you must physically live in the property continuously for at least six months once construction is complete
you cannot generate any income from the property once construction or renovations begin
you and any others can only use the land for legal purposes
the land must not have the option to build more than two residences or residential units under local planning laws, including when combined with adjoining land
you or another family member must not own and occupy another principal place of residence.
You may be able to claim an exemption if you move out of your main residence and live in a residence you do not own. You can claim the exemption for up to six years, or up to four years if you cannot live on the land eg due to renovation.
To qualify, you must:
have lived there continuously for at least six months before moving away
not own another principal place of residence
only earn income from the property to cover basic property expenses such as rates, water and other amenities
not lease out your property for longer than six months in a calendar year.
If you lease out your property for longer than six months, you’ll need to pay land tax in the following year unless you move back into the home before 31 December.
is allowed to live there according to the legal will of the person who has died, or
is not a tenant but occupied the property when the owner died and has been given permission to continue living in the home by the personal representative of the person who has died.
If you own the home you live in through a trust or company, you need to pay land tax if:
the land is owned by a company or owned jointly with a company, unless the company is a ‘trustee company’ under the Trustee Company Act 1964 or the Public Trustee, or a company acting as trustee of a concessional trust.
If you conduct some business at home, you might need to pay land tax for the proportion of the property used for work. You don’t have to pay land tax if you primarily conduct your business somewhere else and only one room in your home is sometimes used for work eg a home office or workshop.
it’s zoned rural, rural residential or non-urban and
it’s mainly used for primary production and you sell the resulting product.
Primary production can include:
maintaining animals to sell them, their natural increase or their bodily produce
cultivating crops to sell
keeping bees to sell honey
growing flowers, orchids or mushrooms to sell
commercial fishing and commercial farming of fish or oysters.
Commercial plant nurseries may also be exempt, but not if the main activity is maintaining plants before sale to the public.
The exemption applies even if someone who is not the owner uses it for primary production.
Land that isn’t zoned rural, rural residential or non-urban may still be exempt if you can demonstrate the main use is primary production and:
it has a significant commercial purpose or character
the level of activity is sufficient for conducting a business and not just for a hobby and
the activities are carried out with the intent to make a profit on a continuous or repetitive basis, (whether or not a profit is actually made).
Primary production is assessed based on activity undertaken on 31 December each year.
We may consider some activity before or after 31 December, especially if the land is currently fallow or in drought. If this is the case, you will need to provide details with your claim.
Land may be eligible for exemption if it is owned or held in trust by a non-profit organisation including:
charities
educational institutions, or
religious organisations.
To qualify, your organisation:
must only have a charitable, educational or religious purpose (this includes caring for aged or unwell clergy or ministers and their wives, widows or children), and
must not carry out business for the profit of its members
Proving your non-profit status
To qualify for this exemption, we will need to see documents outlining your organisation’s regulations, rules and objectives, including proof that income cannot be distributed to members.
These documents need to include:
financial statements for the last two years
your latest annual report
your organisation’s constitution or a copy of the memorandum and articles of association
evidence that there can be no distribution to members if the organisation is wound up.
Land tax exemptions do not apply to vacant land or land where the centre is under construction, even if intended for a child care or education facility.
Crown land: a lease of land owned and managed by state government for which the Crown is liable for land tax.
Council land: owned and operated by the local council.
Land is exempt from land tax if:
the term of the lease is less than 12 months, including any period under an option
the lessee is the Crown, a local or county council or a public authority
the lease was entered into before 1 January 1987 and the terms of the lease relating to rental payable remain unchanged (for land leased from the Crown only)
the lease was entered into before 1 January 1991 and the terms of the lease relating to rental payable remain unchanged (for land leased from local and county councils and NSW public authorities only).
Under the Taxation Administration Act 1996, we may impose penalties for providing misleading and/or false information, or for deliberately avoiding our requests for information.
There are substantial penalties for knowingly making false or misleading statements in connection with an application for exemption.
We conduct investigations and compliance checks to ensure that exemptions are only granted to those clients who are entitled to receive them.
Under reciprocal power arrangements we are also able to obtain information from the Australian Taxation Office (ATO) for the purposes of land tax administration.
