McCullough Robertson Lawyers have provided the following information in relation to land tax. The Office of State Revenue have advised that they will be contacting all landowners claiming a land tax “home exemption” as part of their audit process. Those clients at risk of losing their “home exemption” are:
- clients who rent out rooms in their home
- clients who spend time between multiple properties
- Clients who move into rented accommodation and continue to claim the main residence(NSW)
- Clients who reside on land not necessarily zoned residential (NSW)
- Clients with multiple properties
- Clients who use the same premises to live and carry on a business
- Clients in the process of renovations/demolitions
- Elderly – transitioning into care
- Workers who work overseas, but may have claimed home exemption in past for Australian property.
Land tax is a tax based on the unimproved value of land. In QLD it is assessed on the 12 months from 30 June each year. In NSW it is assessed on the 12 months from 31 December each year.
| Queensland | Tax free threshold | Maximum rate |
| Resident individuals | $600,000 | $62,500 each plus 1.75c for each $1 more than $5,000,000 |
| Trustees, companies and absentees | $350,000 | $75,000 plus 2c for each $1 more than $5,000,000 |
| New South Wales | Tax free threshold | Maximum rate | |
| General | $412,000 (tax free) | $100 plus 1.6% up to the premium threshold | |
| $2,641,000 (premium) | $35,444 for the first $2,641,000 then 2% | ||
Home exemption applies where?
property is owned by a person and used as the person’s home ?
property is owned by trustee and used as home of all beneficiaries of the trust ?
Used as a home statutory tests ?
main test – Continuously used for residential purposes for 6 month period immediately prior to 30 June ?
deeming test – deemed use at 30 June broadly if
– landowner resides in a nursing home/hospital for all or part of the 6 month residency period
– temporarily residing elsewhere due to demolition or renovations ?
residual test – Otherwise if Commissioner satisfied the land is used as a person’s principal place of residence
Land held by trustees ?
still eligible for main residence exemption if land is used by beneficiaries as principal place of residence and a power of appointment has been exercised in favour of those beneficiaries by the trustee ?
may not want absolute entitlement as this would trigger a CGT event ?
may just want to grant a mere right to occupy ?
Note exemption not available for NSW trusts or companies
NSW principal place of residence exemption (post 1 Jan 2005) ?
Home exemption applies where ?
land is used and occupied as the land owner’s principal place of residence, if the land
– is residential land or
– a strata lot ?
‘Used and occupied’ statutory tests ?
main test – the land (and no other land) has continuously been used for residential purposes for 6 month period immediately prior to 31 December ?
residual test – otherwise if Commissioner satisfied the land is used as a person’s principal place of residenceVarious concessions and extensions re exemption ?
If you would like further information or would like to discuss your situation you can contact Lyndon Garbutt, Senior Associate on 07 3233 8921 or email: lgarbutt@mccullough.com.au