There may be circumstances where an owner is absent from their owner-occupied land due to unavoidable circumstances, or for a temporary period after which the first home buyer intends to return. In certain instances, the owner may not return, such as moving into a nursing home.
A special treatment can be provided in certain cases to enable the land to continue to be taxed at the owner-occupied rate.
These include:
Person in full time care
If an included owner is in full-time care, and immediately prior to their entry into care they owned the land, and the land, was owner-occupied, the land will continue to be treated as owner-occupied. No income can be derived during this time except for an excluded residence or amounts reasonably necessary to cover costs associated with the land.
For example, Jim lived in his own home for the last 5 years, which has been treated as owner-occupied for property tax purposes. He recently moved into and now resides at an aged care establishment while being provided with residential care. Jim’s son moved into the property as caretaker and pays all the council, energy and water rates as well as the home insurance. As Jim does not derive income from the land, the owner-occupied rate of tax will continue to apply for so long as these circumstances continue.
Absence from principal place of residence
If an included owner is absent from their land but immediately prior to their absence they owned the land, and the land was owner-occupied, the land will continue to be treated as owner-occupied so long as the following conditions are met:
- the absence cannot be longer than 3 years
- within 12 months of the included owner’s return they must resume occupation for a continuous period of 6 months
- no income can be derived during this time except for an excluded residence or amounts reasonably necessary to cover costs associated with the land or the income is from an excluded residence.
In addition, the included owner cannot use and occupy another residence they own during the time they are absent from their land receiving the special treatment.
For example, Jill had been paying property tax at the owner-occupied rate. The following year she moves overseas for work and rents a flat. Provided she does not receive income, except to cover land related costs or an excluded residence, the land will be treated as owner-occupied for up to 3 years from when she moved out.
Before residence requirement is satisfied
When an included owner becomes the owner of the land, they must move into the home within 12 months and live in it continuously for 6 months. The owner-occupied rate will be applied from the date of settlement to when the included owner moves in, provided no income has been derived during this time.
For example, if John takes ownership of his home on 1 August 2023, John will have until 31 July 2024 to move into the property and must then reside in it as his principal place of residence for a continuous period of at least 6 months.
If John moves into the home in June 2024, he will be taxed at the owner-occupied rate, even during the period from 1 August 2023 to June 2024, provided that he does not derive any income from the land during that period.
By completing the Property Tax Application Form, you declare that the property is intended to be used as your principal place of residence and will be granted special treatment as owner-occupied unless or until you advise that the above criteria are not satisfied.
Unoccupied land to be used as a principal place of residence of owner
Land that is continuously unoccupied due to construction or renovations will be treated as owner-occupied. The duration of this special treatment is up to 5 years, however certain conditions must be met. No income can be derived during this time, and neither the included owner nor their family can use and occupy another residence they own during this time.
Within the first 2 years of the special treatment being applied, works will need to have physically commenced, or significant steps taken to allow physical works to commence. The included owner will need to commence lawful occupation of the land for a continuous period of at least 6 months within 1 year after the building works are completed.
For example, Jack purchased vacant land in the previous year with the intention of building his property. In the current year he lodges a Development Application and building works commences in the second year following settlement of his purchase. Construction of the property is completed by the end of the fourth year, and Jack moves in. He continues to reside in the property for 6 months. For the period of time between settlement of the purchase to the time he moved into the property, Jack was residing in his parent's home. His land will be treated as owner-occupied from when he first purchased the land as he has met all necessary requirements.
By completing the Property Tax Application Form, you declare that the property is intended to be used as your principal place of residence and will be granted special treatment as owner-occupied unless or until you advise that the above criteria are not satisfied.
Apply for special treatment of land
If your circumstances conform with the eligibility criteria outlined above and you would like to apply for a special treatment of certain land, please use the property tax online enquiry form.
