Land Tax

 As a result of the 2007 State Budget certain changes have been made to the Land Tax Act 1936 that effect all land holdings subject to land tax with multiple owners.

The changes introduce anti-avoidance provisions into the Land Tax Act 1936 to “address the practice where owners of more than one piece of land avoid paying higher marginal rates of land tax by structuring their ownerships so that another party (or parties) hold a small minority interest in an individual piece of land thereby creating different legal ownerships. The anti-avoidance provisions will enable the Commissioner of State Taxation to ignore any minority interests in land that are 5 per cent or less unless the Commissioner is satisfied that there is no doubt that the interest was created solely for a purpose or entirely for purposes unrelated to reducing the land tax payable in respect of that, or any other, piece of land. If there is a legitimate reason for placing any very small interest in the ownership of another person or entity the parties will be able to satisfy the Commissioner of that fact.

Where a minority interest is greater than 5 per cent the provision will not apply unless the Commissioner forms the opinion that the purpose or one of the purposes for which the interest was created was to reduce land tax. The Commissioner has no interest in attempting to aggregate holdings where there are legitimate reasons for the holding to be structured in that manner.

The land tax provisions came into effect on 30 June 2008 and will operate from and including the 2008-2009 Land Tax Assessment Year.

Please Contact us on 8362 6400 or email us should you have any questions or if we may be of assistance to you.