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STATE GOVERNMENT LAND TAX

I have received a number of inquiries regarding State Government Land Tax following the 1 October 2006 increases in the Unimproved Capital Value (UCV) of Far North Queensland fee simple properties.

The UCV increases were announced publicly on 27 February 2007 and are also used by Local Government Councils to calculate 2007/08 Council Rates. 

Cairns City Council 2007/08 rate notices for the half-year of July-December 2007 should be received by Cairns ratepayers during the first week of July 2007.

The following information is extracted in part from the Queensland Office of State Revenue and I have placed links at appropriate sections from which you may access additional information. 

There are also two (2) DOWNLOAD documents which you would be well advised to read both, particularly the Land Tax – Information Sheet, if you are now liable to pay Land Tax. 

General information

The Office of State Revenue (OSR) collects land tax in Queensland and administers the Land Tax Act 1915.

Land tax is levied by the Queensland Government on freehold land owned in Queensland as at midnight on 30 June each year.

For land tax purposes "land" includes vacant land, land that is built upon, building unit plans, group title plans, time shares and home unit companies.

Who is liable to pay?

Land tax is payable by the owner of any interest in freehold land in Queensland if the aggregate value of all land interests exceeds the relevant threshold.

There are various classes of taxpayers including residents (natural persons who ordinarily reside in Australia), absentees (natural persons who do not ordinarily reside in Australia), companies (includes clubs, associations etc.) and trustees (includes trustees of deceased persons' estates).

What are land tax thresholds for 2006-07?

Land owned by an individual...

An individual may be liable for land tax if the total unimproved value of the freehold land owned by that person as at 30 June 2006 is equal to or greater than $500,000.

Land owned by a company, trustee or absentee...

A company, trustee (including trustee/s of deceased estates), or an absentee, may be liable for land tax if the total unimproved value of the freehold land owned as at 30 June 2006 is equal to or greater than $300,000.

("Company" includes club, association, society etc. An "absentee" is an owner who does not ordinarily live in Australia or an external territory.)   

Depending on the use of the land, certain deductions may be available to reduce the taxable value of the unimproved land.

See exemptions/deductions for more information.

Exemptions and Deductions

Principal Place of Residence (PPR) - Individuals

When a resident land owner (an individual) uses the land as his/her principal place of residence (PPR), he/she may be eligible for a PPR exemption/deduction.

Generally, land is not used as a PPR unless the owner has used that land, and no other land, for residential purposes continuously for the 6-month period preceding the liability date.

A full or partial exemption/deduction may be allowed where land is used as a PPR and for another purpose.

Full PPR Exemption/Deduction

Land (comprised in 1 parcel) is exempt from land tax if:

Where the exemption does not apply, a deduction from the relevant unimproved value is allowed for the land used as the owner’s PPR.  

Only one property can be claimed as the owner’s PPR whether it is in Queensland or anywhere else.  

The existing full PPR exemption/deduction has been extended and may apply where there is a single letting of part of a person's PPR to family members, or where the land is used for a non-PPR purpose, which is not a substantial non-PPR purpose.

Partial PPR Exemption/Deduction

The PPR provisions have been extended to allow a partial exemption/deduction in certain situations.

A partial PPR exemption/deduction may apply where land is used both as a PPR and for a substantial non-PPR use. In deciding if the purpose is substantial, all relevant factors will be considered, such as whether the property is leased and the extent of the business or income-producing use.

More information

For further information you should refer to: Practice Direction (Land Tax) LT 17.1 - The Land Tax Concession for a Principal Place of Residence.

Please contact me should you require any further information, I would be delighted to assist.

        Land Tax - Information for financial year 2006-07

                          Claim Form LT12 - Exemption/Deduction Claim - Principal Place of Residence (PPR) – Individuals

Respectfully

Selwyn Johnston

Spokesperson

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Written and Authorised by Selwyn Johnston, Cairns FNQ 4870