Land Tax Definition

1. Land tax is an annual tax payable by owners of land. Land Tax is administered by state or territory government and is applicable everywhere except for the Northern Territory.It is usually paid

2. Land Tax is assessed (calculated) by the Commissioner each year based on the property’s actual usage and ownership on that specific date.

3. ‘General’ (taxable) properties include:

• Commercial or vacant land;
• Rental properties;
• Holiday homes;
• Vacant homes etc.

1. Does not include:

• Principal place of residence (PPR);
• Farms Primary production land (PPL);
• All land under threshold amount.

1. The laws between states are comparable, but there are some variations.

   Who pays Land Tax?

1. Land tax assessment will be issued on assessment date to those owners of land with an interest in the land.
   
    
   
   Land Tax for Off The Plan Purchasers

1. For Off the Plan contracts Purchasers will usually need to reimburse Vendor for the proportionate amount of land tax at settlement.
2. Usually calculated as:
   

In NSW, Land values are supplied by the Valuer General, who values land as at the 1 July. To determine the value of land, they add the land value for the current tax year and the land values for the previous two tax years, then calculate the average.

Strata unit valuations:

For strata units, the land value for each individual strata lot is calculated on a proportional basis, using the unit entitlement for each lot and the aggregate for the strata scheme.

 

Thresholds

The Thresholds for Land tax vary between the States.
 

NSW Thresholds

• Land tax is calculated on the total value of taxable land above the land tax threshold (>$482,000).
  • The amount of tax paid is $100 and 1.6 per cent of the land value between the threshold and the premium rate threshold ($2,947,000) and 2 per cent thereafter.

• Value of land is assessed on 31 December of each year.

• In Queensland, Different rates apply depending on this total value and the type of ownership.

• Land tax (for individuals) is calculated on the total value of taxable land above the land tax threshold (>$600,000).

• Value of land is assessed on 30 June each year.
  • It will not matter if the purchaser does not own the land for the full financial year. The liability is not divided between a buyer and seller.

As such, it is advisable to apply for a clearance certificate to make sure purchasers are not charged land tax on purchased land.

• Total taxable value of the land is
• Tax band is $600,000–$999,999.
• Tax calculation = $500 + (1 cent × $80,000 excess) =  $500 + $800.
• Tax payable = $1,300.
  

 

VIC Thresholds

• In VIC, land tax is payable when land exceeds threshold (>$250,000) each calendar year.
• Value of land is assessed on 31 December of the year.
  

• Total taxable value of the land is $280,000.
• Tax band of $250,000-$600.000.
• Tax calculation: $275 + 0.2% of the amount greater than $250,000.
• Accordingly, the land tax payable is $335, being $275 + (($280,000 – $250,000) x 0.2%).