Land held in trust is generally liable for a surcharge and surcharge land tax applies to residential land owned by a foreign person. Discretionary trusts are considered to include foreign persons.
If you have received a communication from the State Revenue Office or you believe you might be assessed with a surcharge land tax as a trust or a foreign person, act now and register your land status with the State Revenue office.
What Is Surcharge Land Tax?
Land tax is a tax on the land you own (excluding your primary place of residence) as at midnight of 31 December of the previous year (in the case of NSW and VIC, some states work on a financial year). If you are a foreign person or if the land you own is held by a trust, you will have to pay surcharge land tax in addition to any land tax you might be liable.
Again, a surcharge land tax is a tax for residential land owned by a foreign person at midnight on 31 December of the previous year. Trusts are classified as foreign. Special trusts also do not receive the benefit of a threshold which applies to naturalised persons or those holding a permanent residence visa.
What You Need to Do
If any of the following applies to you:
- You do not meet the meaning of a foreign owner
- You have amended your trust deed to exclude foreign beneficiaries
- You do meet the meaning of foreign owner and would like to provide the residential land status and/or make amendments to your property ownership
You will have to lodge your land tax return before 31 December 2019. You may do it via your tax agent or if you don’t have one, you may visit your state’s revenue office website and search for “Land Tax” and report your land ownership details online.
Lodging a land tax return online requires a “Client ID” which you can find on your land tax notice of assessment or on all correspondence you have received from the revenue office.
What Happens Next?
If you do not lodge your land tax return confirming the details of your trust and property ownership by 31 December 2019, you may be assessed as a foreign trust and you will be required to pay surcharge land tax. The surcharge land tax then will become applicable to all future and prior year landholdings.
If you are a foreigner and need help filing your tax return, or if you have received correspondence from your revenue office, get in touch with us today.
We can help assess your situation, confirm your land tax surcharge liability, file your land tax return for you, as well as give you property tax advice.
Foreigner and investing in Australian property? Contact a Chan & Naylor accounting specialist here. We can help you invest in Australian property in a tax-efficient way.
Aside from property tax assistance, have a look at our other accounting and advisory services designed to help you achieve greater financial success.
If you like this post, “Surcharge Land Tax for Trusts and Foreign-Owned Land,” subscribe to our newsletter and stay in touch with us by liking our main Chan & Naylor Facebook page, as well as our Linkedin, Instagram, and Twitter pages.
The Chan & Naylor Group has national offices in South West Sydney, Sydney, Pymble and Parramatta in New South Wales, Wheelers Hill, Melbourne, Moonee Ponds and Hawthorn in Victoria, Brisbane and Capalaba in Queensland, and East Perth in Western Australia that can assist you with your accounting needs. Contact us here today.