Thinking about buying a property? You should understand your obligations with land tax. Land tax is an annual tax payable if the total taxable value of all the land you own in Victoria exceeds $300,000, or $25,000 for trusts. It is assessed at midnight on 31 December every year for the succeeding year.
How much land tax do I pay?
If you are not exempted from paying land tax, the amount payable is calculated by applying the appropriate land tax rate to the total taxable value of your land. If the total taxable value of your land increases, so will your land tax obligations in the new assessment year.
What exemptions are available?
The most common land tax exemptions are for:
- Your principal place of residence (“PPR”);
- Primary production land; and
- Charities.
Principal place of residence
The property that you occupy primarily as your home will be exempt from land tax. Generally, you can only claim this exemption once anywhere in Australia, but there are exceptions even to this rule. For example, a ‘dual principal place of residence’ is available if you sold your PPR and bought a new home, but as at 31 December, settlement of your old home had not yet taken place.
Primary production land
If any part of your land is used for primary production, the exemption will apply. The land must be located:
a. Wholly outside greater Melbourne if used primarily for primary production;
b. Wholly or partly within greater Melbourne but not within an urban zone if used primarily for primary production; and
c. Wholly or partly within greater Melbourne or an urban zone if used primarily for the business of primary production.
Charities
Land owned or used by a charity is exempt from land tax if it is:
a. Used and occupied by a charity exclusively for charitable purposes;
b. Vacant and owned by a charitable organisation and is declared to be held for future charitable use; or
c. Owned by a charity and leased for outdoor sporting, recreational, cultural or other outdoor activities and is available for those use by the public.
Other land tax exemptions are also available, such as for Crown land, retirement villages, or caravan parks.
If you would like to find out more about your land tax obligations or any exemptions, email us at hello@wlegalgroup.com.au! Our team of conveyancing lawyers in Melbourne at W Legal Group can help you with your query.
