There are so many things to consider when purchasing a property. One of these is the land tax in Australia. Every year, a property owner pays land tax which is computed based on the unimproved value of land other than the property where he/she lives.
Since each state has its own legislation, there are also different rates, thresholds, and ways to compute land tax.
How do you compute the land tax?
Each state is responsible for collecting land tax. Bear in mind that land tax rates vary depending on the state which has its own set of rules and regulations. Since each state has its own legislation, there are also different rates, thresholds, and ways to compute land tax. The taxable value is computed using the relevant land tax rate and the total taxable value of the land or properties that you own by midnight of June 30.
Another good way to determine the amount of land tax that you need to pay is to use a land tax calculator. This online tool enables you to calculate land tax, considering the different rates applicable on different types of owners or entities. While a land tax calculator is a helpful tool, keep in mind that the figures that you can get from it are only estimates and therefore should not be used to determine the exact amount of land tax that you need to pay to get a land tax certificate.
Who needs to pay land tax in Australia?
A property owner who can be sole or joint owners, a company, an owner of company title units, a trustee of a trust or superannuation fund, or a lessee of local council land.
What are the types of property that you may need to pay land tax for?
As a property owner, you may be required to pay land tax on a vacant land, a vacation home, an investment property, a commercial property, a residential/commercial/industrial unit, and a company title unit. Your main place of residence is exempt from land tax.
Where can you get information about land tax?
Here is a list of websites where you can get information about land tax based on your state:
- QLD – https://www.qld.gov.au/environment/land/tax/
- NSW – http://www.osr.nsw.gov.au/taxes/land
- SA – https://www.revenuesa.sa.gov.au/taxes-and-duties/land-tax
- VIC – http://www.sro.vic.gov.au/land-tax
- TAS – http://www.sro.tas.gov.au/landtax
- WA – http://www.finance.wa.gov.au/cms/State_Revenue/Land_Tax/Land_Tax.aspx
- ACT – https://www.revenue.act.gov.au/duties-and-taxes/land-tax
Use a land tax calculator to get an idea of how much land tax you need to pay. It is also a good idea to seek help from a tax advisor so you will better understand what taxes are involved in your properties. By the time you receive your first land tax bill, you will be prepared.
Is there something about land tax in Australia that we’ve missed? Share your ideas in the comment section.