Amendments to Land Tax Mgmt Act 2005
Amendments to the Land Tax Management Act 1956
The amendments to the Land Tax Management Act commence on the date of assent except where otherwise specified.
Exemption for primary production land
Under Section 10(1)(p) land qualified for a land tax exemption if:
a) the land was zoned rural or non-urban and was used primarily for primary production; or
b) in the case of land other than rural or non-urban, it was used primarily for primary production in the course of carrying on a business of primary production.
Under the new section 10AA the amendments limit the exemption by requiring the use of the land for primary production to be the dominant use of the land. The amendments also deem land zoned ‘rural residential’ to be rural land.
Under the amendments, if land is not rural land, the land will be exempt from taxation only if the use of the land for primary production:
a) has a significant and substantial commercial purpose or character, and
b) is engaged in for the purpose of profit on a continuous or repetitive basis (whether or not a profit is actually made).
This is similar to the requirements relating to the designation of land as farmland under the Local Government Act 1993.
Conservation agreements
Land that is subject to a conservation agreement under the National Parks and Wildlife Act or a trust agreement under the Nature Conservation Trust Act is exempt from land tax. Amendments to sections 10(1)(p1) and 10(2C) restrict these exemptions to agreements and trusts entered into for an indefinite period.
Exemption for land intended to be the owner's principal residence
Under clause 6 of Schedule 1A of the Land Tax Management Act, a land tax exemption applies to vacant land or an unoccupied house where the owner intends to construct a new house or refurbish the existing structure. Under clause 12, each family group, including dependants under 18 years, can only claim an exemption for one principal residence.
Clause 6(7)(b) prevents an owner claiming the exemption if he or she is a joint owner of land which is an exempt residence of any one of the joint owners in another State.
The amendments extend the availability of the exemption to a joint owner of an exempt interstate residence, provided neither that joint owner nor a member of the joint owner's family uses and occupies the interstate residence. This maintains the limit of one exemption per family.
Remove retrospective assessment of former principal place of residence
Clause 8 of Schedule 1A of the Land Tax Management Act allows a person who temporarily vacates his or her principal place of residence to retain the exemption for up to 6 years. The property remains exempt provided the owner resumes occupation or sells the land within 6 years. Land tax only becomes payable if the property is rented for more than 6 months in any calendar year, or if the owner does not resume occupation within 6 years. However, if the owner fails to resume occupation within 6 years, the land becomes liable retrospectively for the entire 6 year period.
The amendments remove this retrospective liability, and instead provide that the land becomes liable for the tax year immediately following the expiration of the 6 year period. This amendment will apply retrospectively from the 2005 land tax year.
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