October 19, 2018

Which State has the Most Expensive Land Tax in Australia?

As the name implies, land tax is a tax on the value of land that is based on the total value of all unimproved land that you own, excluding your principal place of residence (PPR). In Australia, the rate of land tax varies from state to state (eg. In the Northern Territory there is no land tax). Each state or territory government has its own tax rate as well as specific exemptions.

That is why it is essential to know the laws and regulations related to land tax that cover the state (or potentially states – if you’re an investor with property in multiple states) you’re in.

So which state imposes the most expensive land tax in Australia?

Queensland

In Queensland, land tax is calculated on the total taxable value of the freehold land that you own on June 30 each year (excluding your PPR). Rates vary depending on the total value of the land as well as the type of owner that you are. As an individual, you are liable when the total taxable value of your land is $600,000 or more. Companies, trustees or absentees are liable when the land to be taxed is worth $350,000 or more. The liability may also change when certain events occur and a reassessment of your land tax is necessary.

Victoria

In Victoria, your bills for 2017 and 2018 will be based on the 2016 council site valuation. Land tax is assessed using the appropriate rate and the total site value of your land holdings. You are required to pay land tax when the total value of your property as of midnight on December 31 is equal to or more than $250,000, or $25,000 for trustees.

NSW

Land values in NSW are determined as at July 1, preceding each land tax year. To calculate land tax for 2018, the threshold is $629,000, with a rate of $100 plus 1.6% up to the premium threshold. Speaking of the premium threshold, it is $3,846,000 with a rate of $51,572 for the first $3,846,000 then 2% over that.

Western Australia

Land tax is calculated by applying the appropriate tax rate to land owned on June 30.

Aggregated Taxable Value of Land Land Tax Rate
$0 – $300,000 Nil
$300,001 – $420,000 Flat rate of $300
$420,000 – $1,000,000 $300 + 0.25 cent for each $1 in excess of $420,000
$1,000,000 – $1,800,000 $1,750 + 0.90 cent for each $1 in excess of $1,000,000
$1,800,000 – $5,000,000 $8,950 + 1.80 cents for each $1 in excess of $1,800,000
$5,000,000 – $11,000,000 $66,550 + 2.00 cents for each $1 in excess of $5,000,000
$11,000,000 $186,550 + 2.67 cents for each $1 in excess of $11,000,000

Tasmania

Land tax in Tasmania is assessed as on July 1, using the appropriate tax rate.

Taxable Value of Land Land Tax Rate
$0 – $24,999 Nil
$25,000 – $349,999 $50 plus 0.55% of value above $25,000
$350,000 and above $1,837.50 plus 1.5% of value above $350,000

ACT

In the ACT, land tax is computed based on a fixed charge, which is $1,145, and a valuation charge, which is determined using a formula based on the property value.

Do you have ideas on land tax and how to use the land tax calculator? Share your insights in the comments section.

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How is Land Tax Calculated in Victoria?

If you are a property owner, chances are you will need to pay land tax unless it is your own home. One of the factors to take into account when it comes to land tax is that the calculation may vary depending on the state or territory that the property is in. For instance, if you own a property in Victoria, here are some of the things you need to know about land tax, including how it is calculated:

In Victoria, land tax is computed using the rate and the total taxable value or site value of your land holdings. Your place of residence is excluded. The total taxable value may be affected by an increase in the rate in 2017. The 2016 council site valuation will be used as the basis for your 2018 land tax assessment.

You will be required to pay land tax when the total value of all of your properties in Victoria on or before December 31 is equal to or more than the threshold of $250,000 in a calendar year. In other words, the total value of all your property that can be taxed by midnight of December 31 will determine whether or not there is a need for an assessment.

In general, land tax assessments are issued between late January and late May every year. The land tax assessment should have all your land properties in Victoria that you owned as of midnight of December 31 of the previous year. Make sure to check the assessment and confirm that all the details are correct.

As well as your home, primary production land is exempt, along with properties that are used by charity groups. But if you rent out your main place of residence or there is a change of address, the property will no longer be exempted from land tax.

You can use a land tax calculator to get an estimate of your land tax. If applicable, the absentee owner surcharge will be included. To calculate the land tax, you need details such as the year your estimated land tax is for, total value of all the taxable land that you own as of midnight of December 31, and absentee owner status. Make sure to exclude the value of your home or primary production land.

Do you have other ideas when it comes to land tax in Australia? Share your insights in the comments section.

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Understanding Land Tax Exemptions in New South Wale

Taxation is a complex area. It’s such a broad topic that, sometimes, understanding it can be intimidating, not to mention time-consuming. But as taxpayers, it is our responsibility to know the taxes that we need to pay.

For instance, if you’re a land owner, there’s land tax that you need to be aware of. And it varies depending on the state or territory. In this article, let’s focus on land tax and exemptions in New South Wales.

Land tax refers to tax that is levied on landowners on December 31 every year. It is applicable to all land, whether income is generated from it or not. This includes vacant land, land with a house or residential unit, holiday homes, company title units, residential, commercial or industrial units, commercial properties such as shops and warehouses, as well as land that is leased from the State or Local government.

Land tax should be paid by any owner of one or more parcels of land. When it comes to determining land value, the Valuer General in New South Wales values all land every year and provides a value for taxation purposes.

When it comes to land tax exemptions in New South Wales, there are several things to consider:

Principal place of residence

You can claim a land tax exemption for land that serves as your principal place of residence. The value or size of the land does not have an impact on this exemption. Bear in mind that a family can only claim the exemption of principal place of residence for one property.

Principal place of residence concessions for mixed-use properties

If the land serves as both your principal place of residence and area where you operate your business, you may have eligibility for a land tax reduction for the part of the land that is used as your principal place of residence. Only the part of the land that is used for business activities will be up for land tax.

Boarding houses

Land tax exemption may be applied to land that is used and occupied mainly for boarding houses, as long as these meet the guidelines of the Treasurer.

Residential parks

If you’re an owner of a residential park that is mainly used and occupied by retirees, you may be eligible for a partial or full land tax exemption.

Do you have other ideas about land tax exemptions in New South Wales and land tax in Australia? Share your insights in the comments section.

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Understanding Land Tax Exemptions in Queensland

If you are a landowner, there are several things that you need to keep in mind. One of these is land tax. Land tax depends upon various things that affect the amount that you need to pay. One way to calculate your land tax is by using a land tax calculator. However, bear in mind that this online tool is not designed to give you the exact land tax figure. It should only be used as a reference or guide, something that will provide estimates when it comes to your tax payments.

Another thing that you need to know about land tax is the exemptions. In general, these vary depending on where the land is. For instance, land tax exemptions in Queensland may be different from those in other states.

In this article, let’s delve into the land tax exemptions in Queensland:

  • You may be eligible for a land tax exemption depending on the type of land ownership as well as the use of the land. If the land has joint owners, each owner needs to fill out a form to claim an exemption.
  • If there’s an exemption, the taxable value of that piece of land will not be part of the total taxable value of all of your land. In other words, an exemption will lower your land tax.
  • If your land in Queensland serves as your main residence, you may be eligible for a home exemption claim. Fill out an exemption claim for land that is used as a home for individuals. You can download the form and submit it online.
  • If you are a trustee of a trust, you may be eligible for a claim for your land wherein all beneficiaries of the estate use the land as their residence.
  • There’s also such a thing as primary production exemption, and you may be eligible for this if all or a portion of your land is used for agriculture or dairy farming, or the business of primary production.  This also applies to multiple parcels of land, provided that each piece of land is used for the business of primary production.
  • If the land is used for an aged care facility, you may be eligible for a land tax exemption. It’s best to research the Aged Care Act 1997 (Cwlth) to know if you can claim an exemption.

Do you have other ideas on land tax and how to use the land tax calculator? You can share your insights in the comments section.

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Factors that Affect Land Tax in Queensland

In Australia, guidelines on land tax may vary depending on the state you’re in. Queensland, for instance, implements a unique set of guidelines for land owners. The Office of State Revenue (OSR) is in-charge of collecting land tax. It’s also responsible for administering the Land Tax Act 1915. Also, the government of Queensland levies land tax on freehold land owners in the state at midnight on June 30 annually.

There are several things that you need to know when it comes to land tax. In this article, we will delve into the factors that affect land tax in Queensland:

What type of land requires land tax?

Land tax is levied on vacant land, land that is built upon, group title plans, plans of building units, time shares, as well as home unit companies.

What are the different types of landowners?

Owners who may be liable to pay land tax include individuals or residents (natural persons who usually reside in the country), absentees (natural persons who do not usually live in the country), trustees (these include estates of deceased persons), and companies (these include clubs and associations).

What is the taxable value of land?

This is used to compute the land tax that will be paid by the owner. In this case, there is a need to know how the taxable value is applied: whether it is calculated on the statutory land value or the averaged value.

  • The statutory land value refers to the value of the land that is identified by the Valuer-General, Department of Natural Resources and Mines (DNRM). You’ll find it in the annual land valuation notice.
  • The averaged value of land can be the average of the statutory land value for the current and previous two fiscal years, or the statutory land value of the current year, multiplied by the averaging factor for the year.

Moreover, land tax is calculated on the total value of freehold land that you own in the state at midnight of June 30 every year. Concessions are given on land that is used as your main place of residence and if the land is used for a farming business.

Several websites have an online land tax calculator that can give you estimates of the land tax that you need to pay. Bear in mind that this tool should only be used as a reference, since various factors play a role in how land tax is calculated.

Got other ideas on land tax in Queensland? Share your insights in the comments section.

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How Is Land Tax Calculated in NSW?

One of the terms that homeowners and real estate agents in New South Wales encounter is land tax. It is the tax that is levied on landowners in the state every December 31 at 12 midnight. This applies whether the landowners earn money from their land or not.

How to Calculate Land Tax in NSW

It is calculated based on the total value of all of your taxable land that is over the threshold of $549,000. A tax amount of $100 is paid and 1.6% of the value of the land, between the land tax threshold and the premium rate threshold which is $3,357,000. It becomes 2% for the succeeding land value.

Keep in mind that if the land is owned in partnership, the land tax threshold will still be $549,000. Also, there may be assessments on a person’s interest in a partnership if he/she is an owner of other land properties, whether as an individual or with partners.

To have an idea of how much land tax you need to pay, you can use a land tax calculator. You’ll find numerous websites that enable you to calculate land tax based on all the land properties that you own. But as with any other tax-related matters, it is still best to seek professional land tax advice. An expert will help you better understand the land tax that you need to pay as well as whether or not your land is taxable.

Landowners

Who can be considered a land owner? Land ownership comes in many forms. It can be a sole owner, joint owners, a company or owners of title units, trustees of super funds, trust beneficiary, a society or organisation wherein the land is not exempt, unit holders whose interest in a unit trust is entitled to the threshold of land tax, and lessees of a local council land.

Are you a landowner in New South Wales? Your land may be taxable if it falls under any of these classifications:

  • vacant land
  • holiday or vacation home
  • land where a residential unit has been constructed
  • company title units
  • investment property
  • residential
  • commercial or industrial units
  • commercial properties
  • land which is leased from the state or local government

Make sure to check your local taxation website to know more about land tax in your area.

Got other ideas about land tax in Australia? Share your insights in the comments section.

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What do You Need to Know about Land Tax in New South Wales?

If you’re a homeowner or a real estate agent in New South Wales, you have most likely come across the terms land tax and land calculator. Land tax refers to the tax levied on land owners in New South Wales on the midnight of December 31 every year. Whether income is earned from the land or not, land tax is applicable.

Here are some of the things that you need to know about land tax:

  • When it comes to land tax, an owner refers to any of the following: sole owner, joint owners, a company or owners of company title units, trustees of superannuation funds, trust beneficiary, society or organisation where the land is not exempt, unit holders whose interest in a unit trust is entitled to the land tax threshold, and lessees of crown or local council land.
  • If you are considered an owner of land, you may have to pay land tax if the property falls under any of these classifications: vacant land, holiday or vacation home, land where a residential unit has been constructed, company title units, investment property, residential, commercial or industrial units, commercial properties or land which is leased from the state or local government.
  • How is land tax computed? It is calculated based on the combined value of all the land that entails land tax above the threshold. The rate of tax is $100. Add to this is 1.6 per cent of the land value between the threshold as well as that of the premium rate, and two per cent thereafter. Bear in mind that you will not pay land tax if the total value of your land does not go over the land tax threshold. Keep these in mind so you can better prepare should you need to pay land tax.
  • A land tax calculator can be used so you can have an idea on how much land tax should be paid based on all the land that you own and if it entails land tax. There are so many websites that offer land tax calculators, but it is still best to seek help from a professional to have a better understanding of the particulars of land tax in Australia. Getting feedback from friends who have experience in paying land tax will also help.

Do you know other things that should be considered when it comes to land tax? Share your ideas in the comments section.

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Land Tax Proposals from The Henry Review – A Quick Summary

If you have property, you have heard the term “land tax”. And you are obviously aware that there are several factors that come into play when it comes to calculating it. But have you heard of land tax proposals from The Henry Review? It is Australia’s Future Tax System Review that aims to guide tax system reforms for the next 10 to 20 years. Commissioned by the Rudd Government in 2008 and published two years later,

In this article, know more about land tax proposals included in The Henry Review. This report covers 138 recommendations which are classified under nine themes:

  1. Concentrate raising revenues on personal income, business income, private consumption, as well as economic rent from natural resources and land.
  2. Configure taxes and transfers for productivity, participation, and growth.
  3. Implement a simplified personal income tax. A tax-free threshold reaching AUD 25,000, two tax brackets, as well as simplified superannuation, deductions, and offsets.
  4. Establish a fair, adequate, and work supportive transfer system.
  5. Integrate consumption tax compliance with business systems.
  6. Establish efficient resource and land taxation.
  7. Complete the retirement income reform and secure aged care.
  8. Increase rent assistance, move to a uniform land tax, delete stamp duty, and move to a neutral treatment of rental and owner-occupied housing.
  9. Establish a more open, understandable, and responsive tax system.

One important proposal that we can focus on is the removal of stamp duty. Since it is an unreliable revenue source, The Henry Review urges states to replace it with land tax on every property. However, the thing about having universal land tax is that it doesn’t take into account an individual’s capability to pay. Also, it greatly affects those who have a lot of assets but with little cash. These include many retirees. The land tax can be a great financial burden, not to mention the interest charged by the ACT on land tax arrears.

Once you know more about land tax proposals in Australia, you’ll find out that solutions won’t come easy. It will entail a lot of research and agreement among states to ensure that solutions that will be made will be beneficial for most people. As an individual, it pays to have a better understanding not only of land tax but other aspects of property ownership.

Do you have other ideas when it comes to land tax in Australia? Share your insights in the comments section.

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What is a Land Tax Calculator?

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.

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:

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.

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Airbnb and the Land Tax Risk in Australia

Airbnb makes earning a side income easy. But it might expose you to a range of tax risks.

The sharing economy is a handy way to make money on the side of a regular income with assets you already have and at times which work for you. Take Airbnb for example; if you already have a house then it isn’t hard to rent a room on the weekends, or for two weeks during holiday periods when your away.

But, you might be opening yourself up to large tax liabilities. Why is this? Because rental properties and primary homes are treated differently for tax purposes. Here are some of the taxes you need to think about if you are an Airbnb host.

Land Tax

All states and territories charge some form of land tax. The obligations and liabilities are different in each state. Broadly speaking, land tax is charged on rented property and paid by the owner.

A primary residence – your family home for instance – is usually exempt from land tax. However, things can get murky if you start renting through Airbnb. If you are renting part of your home, the state revenue office may class it as a rental, and charge you land tax.

Income Tax

Any income you make from renting your property on Airbnb should be declared. The tax office can easily find out that you are making it, regardless of how you receive payment. Make sure you keep aside enough from each payment to cover your tax liability at the end of the year. The upside is you should be able to claim deductions against this income.

Capital gains tax

Like land tax, you are not required to pay capital gains tax on your primary residence. It is charged, however, on investments, such as a rented property. If liable, capital gains tax is imposed on the difference between your purchase price and the sale price. It has the potential to be a significant amount of money.

The federal and state governments are increasingly using ‘robots’ to find income and check people’s tax liabilities. So, there is no point trying hide the fact that you’re renting, if anything, you will just get hit will a fine once they do find you.

Before going ahead and renting part of your primary home on Airbnb, consider the tax implications. Talk with your accountant to get clarity on how your home will be treated should you start making an income in Australia, even if only part time.

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