Objecting against a Land Tax assessments with the State Revenue Office issuing their 2019 assessments has become a hot topic of discussion. Many have fallen off their chair (and some unable to get back up) after reading that their 2019bill would increase by 40% or more.

What is Land Tax?

Land Tax is a state tax levied on land value. One’s principal residence (home) and farms are exempt, otherwise the land value is taxed under a progressive tax scale.  The first $250,000 is tax free (although that threshold is only $25,000 for trusts).  A higher rate applies to vacant holdings.

It is assessed against the registered hold of the land at 31^st December.  So notices are now being issued for the 2019 year based on who held the land at 31^st December 2018.  Adjustments are made upon settlement to apportion part of the bill to the new owner.

How is the land value calculated?

The State Revenue Office uses local council valuations of the land value. The State Revenue Office adopts new values every two years.

Why such big jumps in values?

Local council assessments of land values have largely jumped across the board. This can have a disproportionate effect as holding values pass through a progressive rates of 0.5%, 0.8%, 1.3% and even 2.25%.

Can you object?

Yes you can.

How do you object against a Land Tax assessment?

You must do so within 60 days of receiving the assessment. You do so by using a prescribed objection form.

Even if you object, you must still pay the assessed tax by the due date. If you objection is successful you will be refunded the excess portion of the assessment with interest.

What do you need to object?

You need a reasonable basis. To begin with, we suggest speaking to your real estate agent (that said, we would expect though that the State Revenue Office would not accept a real estate agent’s valuation).  If the value appears to be excessive, we contend that you will require a valuation from a property valuer.

Implications for commercial and residential property owners

If you are a commercial landlord, you can continue to pass the Land Tax outgoing on to your tenant. If you are the tenant, your outgoings are going to go up.

If you are a residential property owner, you will not be able to on charge the Land Tax to your tenant. It may well be that a lot of large blocks come on to the market or are sub divided.

We welcome the opportunity to discuss your situation and options with you
and to assist you with preparing an objection.