Who needs to pay?
If you own any property that is not your principal place of residence (your home) as at midnight on 31 December, including a holiday house or unit, you may be liable to pay land tax. This includes property that does not earn any income.
Certain lessees from the Crown or a local council are deemed to be owners of the leased land and are also liable to pay land tax.
The amount of land tax payable depends on the combined value of any taxable land you own or have an interest in, excluding exempt land that is above the threshold. The value of taxable land does not include any structures or improvements on the land such as a house. Any land you own outside of NSW is not subject to land tax in NSW.
What land is exempt?
Principal place of residence
Your principal place of residence is generally exempt from land tax. You can usually only claim an exemption for a principal place of residence on one property.
If you use your land as your principal place of residence and for non-residential purposes, for example, if you run a business on your land, you may be eligible for a reduction in land tax for the proportion used as your residence.
If a company is an owner or part owner, generally it is not entitled to an exemption for a principal place of residence.
Concession for land intended as your principal place of residence
You generally do not pay land tax on land intended as your principal place of residence, provided you do not own another property which would have qualified for an exemption as your principal place of residence at the taxing date. You may be eligible for this concession if you:
a) have purchased unoccupied land where you intend to build your principal place of residence (your home), or
b) are renovating an existing home that you intend to occupy as your principal place of residence.
This concession applies for the four tax years immediately following the year in which you acquire the property, or, where you are rebuilding or renovating, for the four tax years starting from the time the building or renovations physically commence. There is no discretion to extend the concession. Prior to the 2011 tax year, the concession applied for two tax years and could be extended under certain circumstances.
Concession for sale of former residence
If you have purchased a house that you have moved into or intend to move into, or vacant land you intend to build on, but still owned your former home at the taxing date you may be able to claim an exemption for both properties.
To qualify for this concession, strict timeframes apply. If the properties are rented, this concession may not apply.
Other exemptions include:
ƒƒland that is zoned rural or non-urban and used for primary production. For all other land the dominant use must be a business of primary production to qualify for the exemption.
ƒƒland used and occupied primarily for boarding houses anywhere in NSW, or certain property used for low cost accommodation within a five kilometre radius of the Sydney GPO.
ƒƒretirement villages, aged care establishments and nursing homes.
ƒƒreligious and charitable institutions.
Read more about exemptions or concessions at www.osr.nsw.gov.au
How is the value of your land determined?
The Valuer General values all land in NSW annually and provides these values to OSR for land tax purposes. Values are determined as at 1 July, preceding each land tax year.
Strata unit valuations
For strata units, the land value for each individual strata lot is calculated on a proportional basis using the unit entitlement for each lot and the aggregate for the strata scheme. Landowners can find out more, or request a land valuation brochure and a general valuation sales report by calling the Land and Property Management Authority toll free on 1800 110 038.
Read more about land valuations at www.lpma.nsw.gov.au/valuation
Since 2007, the value used to determine your land tax liability will generally be the average of the land value for the current tax year and the land values for the previous two years. Where a parcel of land was only recently created (eg by subdivision or amalgamation) the average value will be based only on the land values for those taxing dates when the newly created land item did exist.
What if I disagree with the land value?
Landowners are entitled to submit an objection with the Land and Property Management Authority within 60 days from the date of issue of a land tax assessment. Objections must be made using a valuation objection form or by using the Land and Property Management Authority online objection facility at www.lpma.nsw.gov.au/valuation
Landowners can obtain more information on land values or request a valuation objection guide, a general valuation sales report for the locality and a valuation objection form from the Land and Property Management Authority by calling toll free on 1800 110 038.
How is land tax calculated?
Land tax is calculated on the combined value of all the taxable land you own.
The land tax threshold for 2011 is $387 000. This means your land tax assessment is calculated on the combined value of all the taxable land you own above this threshold. The amount of tax is $100 plus 1.6 per cent of the land value between the threshold and the premium rate threshold ($2 366 000) and 2 per cent thereafter.
Note: where land is owned in partnership, one threshold applies regardless of the number of owners. That is, where land is owned in partnership, the threshold would still be $387 000.
An individual’s interests in a partnership may also be assessable if that owner holds other land individually or with other partnerships.
If the combined value of your land is equal to or below the threshold, no land tax is payable.
Special trusts: If land is owned by a trustee of a special trust the land tax threshold does not apply and land tax will be charged at a flat rate of 1.6 per cent of the taxable value up to the premium threshold, and then 2 per cent thereafter.
Non-concessional companies: Where the concessional or joint concessional companies' land value exceeds the premium rate threshold, the land value of each non-concessional company is assessed at 2 percent of the taxable value.
Where the concessional or joint concessional companies land value does not exceed the premium rate threshold, but exceeds the general threshold, the land value of each non-concessional company is assessed at 1.6 per cent of the taxable value.
source : www.osr.nsw.gov.au