DID YOU KNOW? Land tax applies regardless of whether income is earned from the land.
KEY TAKE OUTS:
- To improve your understanding or knowledge of Land Tax and the 2020 Land Tax thresholds
What is Land Tax?
Land Tax is an annual tax charged on all property you own that is above the land tax threshold. Generally speaking, your principal place of residence is exempt.
2020 Land Tax Thresholds.
Revenue NSW has announced the Land Tax thresholds for 2020 are as follows:
General threshold: $734,000
Premium threshold: $4,488,000
The general threshold for 2020 has increased by $42,000 from 2019. The premium threshold for 2020 has increased by $257,000.
How is land tax calculated?
Land Tax is calculated on the total value of all your taxable land above the threshold, not on each individual property. If the combined value of your land does not exceed the threshold, no land tax is payable.
The rate of tax is calculated as $100 plus 1.6% of the land value up to the value of the premium threshold. The rate of tax increases to 2% after the premium threshold.
The threshold is applied to land holdings on 31 December each year and is applied for the full year following the taxing date of 31 December. No pro-rata calculation applies.
How is the land value determined?
Land value is determined by the valuations issued by the Valuer General to Revenue NSW. The valuation from the previous year is used. For example, the 2019 value is used for the 2020 tax year. Note: the value is based on land only and does not take into consider any improvements on the land.
What do I do if I think I may be liable to pay Land Tax?
If you haven’t received a notice of assessment you can register online or phone Revenue NSW on 1300 139 816.
It is your responsibility to register for Land Tax if the value of all your taxable land is above the threshold. It is not the responsibility of Revenue NSW to notify you that you are required to be registered and/or follow up payment. This is the case even if you haven’t received a notice of assessment from them.
Failure to register for land tax may result in penalties such as interest charges.
For more information about registering for land tax, you can click through to this link to the Revenue NSW website https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/land-tax
ABOUT MELINA COSTANTINO:
Melina has over 9 years’ experience as a Licensed Conveyancer, acting for client matters involving; purchase and sale of residential and commercial property, Retirement Village Contracts, Put & Call Options, Call Options and Family Transfers. She is passionate about helping a wide range of clients across all aspects of the buying and selling process and ensuring that her clients meet all their legal obligations.
For further information please don’t hesitate to contact:
This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.