Land tax is payable on the taxable value of all land situated in NSW and is charged on land as owned at midnight 31 December each year. A land owner may be exempted from land tax payment on their principal place of residence and this term is widely known as “PPoR”.
The PPoR concession is defined by ATO as land that is used and occupied by the owner as their principal place of residence and for no other purpose if the land is residential land or a residential strata lot.
What happens if you move out of your PPoR and move into another residence that you do not own? For example, you are posted to another part of NSW, interstate or overseas and currently pay rent for your accommodation, in this situation, you may be able to continue to claim exemption from land tax on your PPoR.
In this scenario, the ATO can allow the concession for a maximum period of six years as long as the land is capable of being used as a residence during the six years period.
To be eligible for the above concession:
- You have used and occupied the property as your PPoR for a continuous period of at least six months prior to your departure from your home
- You do not own and occupy another PPoR worldwide since then
- The total period in which you receive rental income from your PPoR does not exceed six months in a calendar year
- Rental income received from your PPoR during your absence is no more than is reasonably required to cover rates, water and electricity charges and similar outgoings (this excludes mortgage repayments)
For any assistance with respect to your land tax liability whether as an individual, company, trustee or beneficiary, please contact Quinn Lawyers who can assist you with compliance with your land tax obligations or submit an online enquiry.