LAND TAX – 12 things you need to know

  1. What is land tax?
    Land tax is an annual state-based tax levied on the owners of land.
  2. What land is caught?
    You may be liable for land tax if you own:

    • one or more investment properties,
    • vacant land, including vacant rural land,
    • a holiday house or
    • some primary production land that is not exempt due to its location close to a city.
  3. Surely not my home.
    In general, your principal place of residence is exempt from land tax.
  4. I live on a farm.
    Land used for primary production (a farm) is also exempt.
  5. When is it assessed?
    Land tax is assessed on a calendar year basis. In Victoria, ownership is taken as at midnight on 31 December of the year preceding the year of assessment (i.e. 2013 assessment is based on land holdings at 31 December 2012).
    Land Tax assessment notices are mailed out to you between February and late May each year.
  6. When do I have to pay it?
    Generally if your land holdings have a total taxable value of $250,000 or more (excluding exempt land) you must pay land tax.
  7. Special Rules for Trusts
    This gets messy.  Land held by trusts for the benefit of a beneficiary needs only be valued at $25,000 or more for trusts to be subject to Land Tax.The tax also carries a surcharge when held by a trust.  Victorian landholdings between $25,000 and $3 million attract a surcharge on top of land tax.  The surcharge is 0.375% for aggregate landholdings between $25,000 and $1.8 million and then tapers away for landholdings valued between $1.8 million and $3 million. The top rate of land tax (applying to taxpayers with landholdings valued above $3 million) is not affected by the surcharge.Superannuation Funds are excluded from the surcharge, but not the Land Tax.The trustee of a discretionary trust or a unit trust is not liable for surcharge on trust land occupied by a nominated beneficiary as his/her principle place of residence.
  8. What is the taxable value of land?
    It is the site value provided by the relevant municipality.  Councils usually conduct general valuations of land every two years.
  9. How is land tax calculated?

    2009 – 2012 Land Tax Rates

    Total taxable value of landholdings Land tax payable
     < $250,000 Nil
    $250,000 to < $600,000 $275 plus 0.2% of amount > $250,000
    $600,000 to < $1,000,000 $975 plus 0.5% of amount > $600,000
    $1,000,000 to < $1,800,000 $2,975 plus 0.8% of amount > $1,000,000
    $1,800,000 to < $3,000,000 $9,375 plus 1.3% of amount > $1,800,000
    $3,000,000 and over $24,975 plus 2.25% of amount > $3,000,000
  10. What if my assessment is incorrect?
    If you think that you’ve been assessed incorrectly then you can object to the assessment.
  11. Who’s exempt?
    Land owned and used by the following types of organisations might be exempt from land tax:

    • Non-profit Societies
    • Clubs and Associations
    • Religious Institutions
    • Public Benevolent Institutions
    • Charitable Institutions
  12. Other info
    In the Australian Capital Territory land tax is levied on lessees under a Crown lease.  There is no Land Tax in the Northern Territory.

If you’d like to know more about Land Tax and how to deal with it,
call the office on (03) 9585 7555 and ask for Noel or Amanda,
or email us atnoel@noelmay.com.au