All investment properties (and holiday homes) are subject to land tax in the State it is located in.
Land tax is payable on the unimproved value of the land only and does not include the building.
Land tax is also due on your home if you rent your home out.
Land tax will be assessable for the period of time that the home was rented out.
There are different rules for different States in respect to the Land Tax Threshold for Individuals, Partnerships, Trusts, Companies and SMSF’s.
Generally Individuals, Companies, SMSF’s have their own land tax thresholds (before land tax is payable).
Partnerships also have their own threshold but the individual partners gets assessed again at a secondary level after crediting their portion of tax paid at the primary partnership level.
Here are the dates for each State and as you can see it’s either 31st December or the 30th June.
OSR land tax assessment dates
- NSW – Midnight 31st December
- VIC – Midnight 31st December
- QLD – Midnight 30th June
- TAS – 1st July
- ACT – (has been divided into 3 sectors for billing purposes)
- Sector 1 – 15th November, 15th February, 15th May
- Sector 2 – 15th September, 15th March, 15th June
- Sector 3 – 15th October, 15thJanuary, 15th July
- SA – midnight 30th June
- WA – 30th June
This means if you own property for one day on the 31st December 2015, (or 30th June 2015) you are than liable for the whole years land tax (called 2016 covering 1st January 2016 to 30th December 2016) and (1st July 2015 to 29th June 2016).
So even if you sold the property on the 2nd January 2016 (or 2nd July 2015) you are still liable for the whole 2016 calendar year. (Or next 2016 Financial year).
So careful tax planning can save you quite a lot of land tax in just getting the timing right.
Here are also the websites for each of the different “Office of State Revenues” around the country.
You can see the different land tax thresholds applicable for each State.
You can also see how the different States treat Trusts.
- NSW – http://www.osr.nsw.gov.au/
- VIC – http://www.sro.vic.gov.au/
- QLD – https://www.treasury.qld.gov.au
- WA – https://www.finance.wa.gov.au
- NT – www.treasury.nt.gov.au (do not add http://)
- SA – https://www.revenuesa.sa.gov.au/
- TAS – http://www.sro.tas.gov.au/
- ACT – http://www.revenue.act.gov.au/
In most States land tax is self assessing.
Meaning if you do not lodge a land tax return they will not be aware that you are liable.
You may think you have got away with Paying no land tax until you are audited and or when you try to sell the property the purchasers solicitor will require a land tax clearance from the OSR and its at this point you will be caught and penalties and interest will be applicable.
Once you have lodged that first years land tax return you are now registered on their system and in most States they will issue you an annual land tax assessment automatically each year. It’s simply the first year that you need to be aware of.
They will increase each years assessment based on increased land value.
You have the right to object to a land tax assessment if you can prove their land value is too high.
The OSR will use the Valuer Generals land rate notice as a guide to the unimproved value of the land.
If you have any problems or you have any questions or if you would like Chan & Naylor to lodge that first land tax return for you please contact your Client Manager for an assessment.
Disclaimer: This article contains general information; before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs. Click for more detail regarding this disclaimer.