As the clock strikes 12, champagne corks will be popping and taxes should be the furthest thing on your mind ……….
However if you own property in NSW other than your principal place of residence (a block of land, a unit, a house, a holiday house) at midnight on the 31 December you may find yourself liable for land tax. This tax is often overlooked and can be payable even if you don’t earn income from the property!
All states and territory governments in Australia (except the Northern Territory) impose land tax. In all other states the amount of land tax and the dates land tax is imposed differs so I encourage you to check with the Office of State Revenue (OSR) in the state you hold property on order to ascertain if you have a liability.
If you are unsure if you need to pay land tax you should contact your accountant or the OSR directly and they can advise on your individual circumstances.
As a guide I have set out information relevant to NSW only.
WHAT IS LAND TAX?
Land tax is applied to the value of any property you own or jointly own in NSW that is above the land tax threshold as at midnight on 31 December.
Land tax is not applied to your principal place of residence (your home).
HOW DO THE OFFICE OF STATE REVENUE COME UP WITH A VALUE FOR YOUR LAND?
The OSR use an average of the land value for the current tax year and the previous two years. You can contact the OSR on 1800 110 038 to obtain an exact valuation or you could use as an approximate value the valuation shown on your council rate notice to ascertain if you are near the threshold in the first instance.
WHAT ARE THE THRESHOLDS?
The rates and thresholds for the 2015 year are listed below:
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The rates above applies to:
- a sole owner
- joint owners
- a company
- owners of company title units
- trustee of any trust
- beneficiary of a trust which is not a special trust
- society or organisation whose land is not exempt
- unit holders with interest in a unit trust which is entitled to the land tax threshold
- trustees of superannuation funds
- certain lessees of crown or local council land.
BEWARE OF THE LAND TAX RATES WHERE NO THRESHOLD APPLIES EG FOR FAMILY TRUSTS
We note however the above rates do not apply to special trusts. Examples of special trusts include most family trusts, discretionary trusts, some unit trusts and some trusts created by a will. The land tax threshold does not apply to special trusts.
The rates and thresholds for the 2015 year for special trusts are listed below:
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CALCULATING THE VALUE OF LAND OWNED
To assist you in assessing if you are liable for land tax, complete the table below.
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HOW TO REGISTER & WHEN DO YOU NEED TO REGISTER BY?
If you feel you are close to or will exceed the threshold, contact the OSR on 1300 139 816 or register online at http://osr.nsw.gov.au/taxes/land/online by 31 March 2015.