Land Tax is payable on the taxable value of all land situated in NSW and is charged on land as owned at midnight on the 31st December each year.
Land Tax is payable by the owner of the land on all land owned by that owner in NSW which is not exempt. Joint owners of land are assessed as per their interest in the Land which is combined with any other land holding of theirs in NSW.
There are several concessions however to the liability to pay land tax including concessions for:-
- Principal Place of Residence.
- Incidental business purpose
- Unoccupied land intended to be the owners principal place of residence.
- Change to principal place of residence
- Absences from former residence
- Death of owner
- First home owners who purchase under a shared equity arrangement or shared equity scheme
- Multiple occupancy land
Principal Place of Residence concession
The most widely known concession is the Principal Place of Residence (‘PPOR’) concession where land 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 residential strata lot.
Now what happens where there is a granny flat or you rent out a room in your home. For the purposes of the PPOR exemption there are certain residential occupations that will be considered a “excluded residential occupancy” subject to individual circumstances including:-
(a) one room,
(b) one suite of rooms (not being a flat) each room of which all occupants of the suite are entitled to occupy,
(c) one flat,
(d) one suite of rooms (not being a flat) each room of which all occupants of the suite are entitled to occupy, and one room,
(e) one flat and one room,
(f) 2 rooms, each of which is separately occupied.
Incidental Business Purposes concession
Where the land is used and occupied by the owner primarily for residential purposes but not more than one room is used primarily for business purposes, the use of the land for the purpose of the business may be disregarded if the business is primarily conducted elsewhere.
Unoccupied land intended to be the Owner’s Principal place of residence
Where the owner intends to use and occupy the land solely as his or her principal place of residence and the land is unoccupied because the owner intends to carry out, or is carrying out, building or other works necessary to facilitate his or her intended use and occupation of the land as a principal place of residence, and if those building or other works have physically commenced on the land and no income has been derived from the use and occupation of the land since that commencement. It should also be noted that there is a 4 year limit with this concession.
Requirement to be registered
Each Landowner in NSW who has assessable land should be registered for Land Tax. It is the land owners obligation to do so.
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.