Legal Comment by Mark Illidge of Hinterland Lawyers

June 2005

Good news for landholders from the recent State Budget.  The Land Tax Amendment Bill 2005 provides fewer and broader taxable value bands, rate reductions, and increased tax free thresholds.  The Bill also provides a new land tax exemption for moveable dwelling parks (caravan and residential parks) that meet certain criteria relating to long term residential accommodation.

The existing land tax rate scale has been replaced by two separate rate scales â€" one for natural residents, and one for companies, absentees and trustees.  For individuals who reside in Australia, land tax will only apply if the taxable value of land owned at 30 June 2005 is $450,000 or more.  For companies, absentees and trustees, land tax will only apply if the taxable value of land owned at midnight on 30 June 2005 is $300,000 or more.  The new rate scales also incorporate the existing statutory deduction, exemption thresholds, rebates, and the minimum tax payable amount.  The benefits of three yearly averaging of land values will continue.

Currently, a land tax exemption applies where a Principal Place of Residence (PPR) is used exclusively as a home.  In recognition of changing work arrangements, the government is developing further legislation to allow apportionment of the PPR exemption or full exemption in certain circumstances, such as when certain working arrangements are incidental to the residential use.  This additional Bill is to be introduced in late 2005, to take effect for land tax in 2005/06.

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