Land tax is a tax imposed on the owners of land in NSW as at midnight on 31 December of each year by the Office of State Revenue (OSR). Generally, your principal place of residence (PPOR or your home) or land used for primary production (a farm) is exempt from land tax. Land owners are generally liable for land tax when the unimproved value of taxable land exceeds certain thresholds. For tax payers who own land jointly, they are considered as a joint owner of a land and assessed differently.
As of 2013, the Valuer General has determined that the land tax threshold for the 2013 land tax year is $406,000. The premium land tax threshold for the 2013 land tax year is $2,482,000.
What happens if I own land jointly?
If you own land with one or more other owners, you are considered to be a joint owner of land. Joint owners may be any combination of owners, either as joint tenants or as tenants in common, who in turn may own other properties, either in their own right or together with other people
How am I assessed for land tax if I am a joint owner of land?
If you are a joint owner of land you will be assessed as follows:
•The joint owners together are called the ‘primary taxpayer’ and are assessed as if they are a single owner. All joint owners are jointly liable for the land tax payable by the primary taxpayer.
•Each joint owner is called a ‘secondary taxpayer’ and will be assessed separately for their interest in the jointly owned property together with any other land holdings. The other land holdings can be held either as a single holding or as an interest in land owned by another joint ownership.
•If an owner owns other land jointly with different persons, each unique combination of joint owners will be assessed as separate primary taxpayers. For example, if A owns an item of land jointly with B, and A owns a separate item of land jointly with C, there are two primary taxpayers who will each be assessed separately – A with B, and A with C.
How do I legally prevent double taxation?
To prevent double taxation on land included in assessments for both a primary taxpayer and a secondary taxpayer, a secondary taxpayer is entitled to a deduction which relates to the taxpayer’s interest in the jointly owned land.
For more information on land tax or to find out if you are eligible to legally prevent double taxation for any of the other land tax concessions and exemptions contact our experienced team of lawyers and accountants here at The Quinn Group. For any other accounting or legal advice submit an online enquiry or call us on 1300 QUINNS (1300 784 667) or on +61 2 9223 9166 to book an appointment today.