Land tax is an annual tax payab
le by owners of land. Land tax is administered by each state or territory government and is applicable everywhere except for the Northern Territory.
The laws between each state are comparable, but there are some variations in how the taxes are calculated and the thresholds. The amount of land tax you pay is determined by the combined unimproved value of taxable property. If your business owns property, then it is likely you will need to pay land tax on it.
It is important that you know what your entitlements are, because land owned by some types of organisations can be exempt from land tax.
Your main home (i.e. permanent residence) is generally exempt from land tax.
With the market softening in some states, it appears that some UCV (Unimproved Capital Value) assessments have increased, where in fact, many believe they should have reduced or remained static.
Investment property owners receiving their next land tax valuation assessments should pay close attention to the land value stated on the assessment notice and monitor sales of similar properties. If you are concerned with any substantial increase in land value and the consequent land tax payable, you should consider having the land value reviewed.
LAND TAX AND EXEMPTIONS SUMMARY
To determine the land tax calculation methods for each state of Australia visit www.business.gov.au/finance/taxation/land-tax.
From an investment point of view, it is also important to know the land tax thresholds and calculations, as it could be a prudent decision to spread your investment portfolio across several states to reduce your land tax payable.
If you feel that your land tax is incorrect or over-inflated, you can object or dispute the assessment notice by contacting your land tax state governing body. Each state has a slightly different process and time-frame to apply.
If you are concerned about your land tax assessment, we recommend that you seek professional advice from your accountant, solicitor or state land tax department.