2006 Land Tax Rates by Paul Anderson | December 2005
The State Government has announced the new land tax rates for 2006. Land tax is payable on the total land value of land in New South Wales owned as at midnight on 31 December of the previous year. In the case of the 2006 year, this means as at midnight on 31 December 2005. Land includes: • • • • •
Vacant land, including vacant rural land. Holiday homes. Company title units. Residential, commercial or industrial units; and Commercial properties, including factories, shops and warehouses.
Exemptions include a taxpayer’s principal place of residence and land zoned rural or non urban and used primarily for primary production. The value of taxable land does not include any structural improvements such as a house. The value is determined by the Valuer General on 1 July of the preceding year.
2006 Rates The land tax threshold for 2006 is $330,000. Above that threshold, the rate is $100 plus 1.7 % of the land value above $330,000. For example, if the total taxable value of land is $450,000, the land tax payable is $100 plus $2,040 or $2,140.
Companies and Trusts There is no threshold for non-concessional companies and special trusts but the rate is still 1.7% of the land value. For example, if a non-concessional company or special trust has a total land value of $180,000, land tax payable will be $3,060.
Returns If a taxpayer is liable for land tax for the first time in 2006, a registration form must be lodged by 31 March 2006. If a taxpayer lodged a registration for 2005, he or she does not need to register again but will automatically receive a notice of assessment for 2006.
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If there has been a change in the taxpayer’s circumstances, e.g. a property was sold during 2005, it is necessary for the taxpayer to lodge a variation.
Payment Land tax is payable in one of two ways. Under the first option, a taxpayer can pay land tax in full by the 1st instalment date and receive a 1.5% discount. The second option is to pay by 3 instalments without a discount.
Implications All first time tax payers will need to register by 31 March 2006. All taxpayers can expect to receive an assessment early in the New Year determined in accordance with the 2006 rates.
For more Information please contact:
Paul Anderson Partner T: 02 8257 5742 paul.anderson@turkslegal.com.au
Sydney | Level 29, Angel Place, 123 Pitt Street, Sydney, NSW 2000 | T: 02 8257 5700 | F: 02 9239 0922 Melbourne | Level 11 | 350 Collins Street , Melbourne, VIC 3000 | T: 03 8600 5000 | F: 03 8600 5099
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