What is Land Tax?

What is land tax? This is a question often asked by serious property investors who already have or in the process of accumulating an investment property portfolio.

It is the taxpayer’s obligation to advise if they are subject to land tax . This is based on self-assessment by submitting either a land tax registration form or a land tax variation form. Unfortunately failing to submit these forms or notices can cause significant penalties and backdated charges. The penalties can vary greatly and be quite alarming.

What is land Tax?

Land tax is generally levied on the unimproved capital value of the land (not the total property value). Each state apply different rules and thresholds. The threshold is the dollar value at which land tax will become payable. If it’s below the threshold, no land tax is levied, however if it exceeds this amount land tax commences at the prescribed rates. Please note depending on the ownership, these thresholds can vary (i.e. individuals, companies, trusts etc.).

Fortunately, exemptions are normally applicable to the principle place of residence. If the taxpayer decides to move out and use the property as an investment, land tax may be due even if still within the main residence six year rule for ATO purposes. This requires a variation form to be processed. A long-term plan is therefore essential. In these situation we recommend the assistance of your accountant or tax agent.

To ensure your circumstances are reviewed correctly, please contact us. We can introduce you to a qualified tax agent who can help assess your situation.

www.crestproperty.net.au

While we have taken care to ensure the information above is true and correct at the time of publication, changes in circumstances and legislation after the displayed date may impact the accuracy of this article. If you want to learn more, please contact us. We welcome the opportunity to assist you.

Feb 2018