Land tax is a hefty cost faced by many landowners. If you own land or property in Australia, find out what concessions and exemptions apply to various property types and situations.
From boarding houses to caravan parks to non-for-profit organisations, there are certain property types that may be exempt from land tax.
Land tax is administered by each state and territory government and is applicable everywhere in Australia except for the Northern Territory.
The laws between each border are comparable. In particular, most states offer exemptions for land that is used as a principal place of residence (PPOR), the primary production of land and for a retirement village.
That common ground aside, there are some distinct differences between states.
Know what your entitlements are as there are many types of organisations and land purpose types that may be exempt from land tax.
Information provided by the ACT Revenue Office outlines that residential land used as a retirement village, nursing home or by a religious institution to offer accommodation to members is exempt from land tax.
Other land tax exemptions include:
- Land used for rural purposes
- Broad-acre subdivision
- A property with a guardian for a person with a disability;
- Residential land owned by a trustee under a will of a deceased person
- Residential land owned by a not-for-profit organisation
The ACT Revenue Office may offer an exemption on compassionate groups for a residential property that is rented where the Commissioner is satisfied that the owner is temporarily absent due to a compassionate reason.
Builder’s land tax exemption
A two-year land tax exemption may apply to land that is owned by a building or land development company. If you’re eligible, this exemption begins on the first day of the first quarter after the corporation becomes the owner of the parcel of land.
You can access the application form on the ACT Revenue Office website.
The following properties are eligible for a duty concession or exemption in NSW:
Primary production land
You may be exempt from paying duty if the main use of the land is for primary production (farming to most folks).You can still receive the exemption even if you’re not the only undertaking the primary production activity.
To realise this exemption, you’ll need to complete and submit an Application for Exemption- Primary Production Land (OLT 028) form which you can find on the NSW Office of State Revenue (OSR) website.
An exemption is offered for land used and occupied for boarding houses that meet the guidelines as outlined by the Treasurer.
To apply for this exemption, complete and complete an Application for Exemption- Boarding Houses Tax form which you can access from the NSW Office of State Revenue (OSR) website.
Low cost accommodation
An exemption is provided for land that is used for low cost accommodation that is within a 5km radius of the Sydney GPO. To apply for the duty exemption, submit an Application for Exemption- Land Used for Low Cost Accommodation Tax form.
If you own a residential park, such as a caravan park, that is used and occupied by retired persons you may be entitled to a full or partial exemption. For more information, visit the NSW Office of State Revenue (OSR) website.
Non-profit organisations such as charitable or educational institutions may be eligible for a land tax exemption. Aged care establishments and retirement villages may be exempt.
For more information, view the Revenue ruling - LT 031 - Exemption for Retirement Villages and Nursing Homes.
Child care centres
Land that is used for the education or care of children may be exempt from land tax. For details, visit the NSW Office of State Revenue (OSR) website.
Land tax is administered by every state and territory in Australia except for the NT.
Along with the home, trustees, transitional home and primary production exemptions, the following properties and organisations may be exempt from land tax in QLD.
Moveable dwelling (caravan) parks exemption
According to the QLD government, a moveable dwelling park is defined as a place where a caravan or manufactured home sites are leased or rented. You may be able to claim an exemption if the land is used mainly as a moveable dwelling park or if more than 50% of the sites in the park are occupied or available for occupancy.
To claim this exemption, you’ll need to fill out and submit a moveable dwelling park exemption claim (Form LT18) from the QLD government website.
A charitable organisation may be able to claim a land tax exemption on land that is used for one of the following reasons:
- A religious or educational activity
- Care for children, sick, aged or incorrigible people
- Promoting the public good
- A charitable purpose
Fill out a charitable institution exemption claim (Form LT15) for land owned by a registered charitable institution and used for an exempt purpose.
Aged care facilities
The QLD government offers an exemption if the land is used as a location for an aged care facility. The exemption is offered to facilities where a provider under the Aged Care Act 1997 provides care.
To apply for this exemption, complete an exemption claim (LT20) for land used as an aged care facility.
An exemption applies if the land is used for residents of a retirement village. You’ll need to fill out an exemption claim (LT20) for land used as a retirement village to apply for this exemption.
Society, club or association
The QLD government provides an exemption for non-for-profit societies, clubs or associations. To realise this exemption, complete an exemption claim for societies, clubs and associations (form LT19) which can be found on the QLD government website.
In accordance with the Land Tax Act 1936, an exemption from land tax may be granted for land used as principal place of residence and land used for primary production, as well as the following (among others):
- Land used for religious or medical purposes
- Land owned or occupied by an association that assists helpless persons
- Land owned by an association that conserves native fauna or flora
- Land owned or occupied without payment by a person or association carrying on an educational institution not-for-profit
- Land owned by an association established for a charitable, educational, benevolent, religious or philanthropic purpose
- Land owned by sporting or racing associations or an ex-servicemen association
- An association is of a prescribed kind if it holds land wholly or mainly for the purpose of providing services or support to the community, or a sector of the community, in relation to literature, science, languages, the arts, the preservation of historical, traditional or cultural heritage, or for a similar purpose.
- Land owned by a prescribed body and used for the benefit of the Aboriginal people.
To apply for this exemption, fill out an application for exemption pursuant to Section 4 of the Land Tax Act Form available on the RevenueSA website.
Additionally, the government offers an exemption for:
- land that is a caravan park; and/or
- land that is a supported residential facility and licensed as such under the Supported Residential Facilities Act 1992;
- a retirement village or residential aged care facility
To realise one of the above exemptions, complete the application for exemption pursuant to section 5 of the Land Tax Act form.
The Tasmanian government Department of Treasury and Finance says that concessions and exemptions for land tax apply to the following:
Home business land tax concession
You may qualify for the home business land tax concession if:
- The business is operated from a residential building that is your principal residence,
- Operation of the business occupies no more than 50% of the residential premises floor area,
- The business is operated by the landowner or by their immediate family member, and,
- The business is operated from a standard residential building (e.g. not a commercial building)
To realise this exemption, you’ll need to complete an application for home business concession which you can find on the TAS government website.
Primary production land (PPL) classification
Land tax is not payable on land with a PPL classification as at 1 July each year. If you’re thinking of applying for the PPL exemption, you should read the Primary Production Land classification guide on the TAS government website.
The Land Tax Act provides four categories that may be classified as primary production land:
- Land used for the business of primary production
- Land declared a Private Timber Reserve
- Land that is a permanent timber production zone
- Land subject to a certified plan under the State Permanent Forest Estate
Principal residence land
A principal residence land classification may be applied to land on which a dwelling is occupied and used by the owner as their principal place of residence.
If only part of the principal residence land was used as a main place of residence as at 1 July, only that portion of the assessed land value can be classified as principal residence land.
To realise the principal residence land classification exemption, you can apply online through TAS government website.
Rebate for two residences owned in transitional circumstances
If you purchased a new principal place of residence at June 30 but you have not yet sold your current principal place of residence, you may apply for a rebate on land tax.
However, you must meet the following conditions:
- A contract for sale of the new residence must have been entered into on or after 1 April of the year prior to the current tax year,
- At least 50% of the second property (the new residence) must be owned by the same owner(s) and it must have been purchased on or after 1 April;
- A contract for sale for either property must have been entered into prior to 1 October;
- Neither residence must have been rented out or used to derive income during the transitional period when both were owned;
- no apportionment for land tax on the sold property between the vendor and the purchaser must have occurred; and
Keep in mind that your application must be lodged with the State Revenue Office within three months after 30 June of the following year.
In addition to the PPR, primary production land (PPL) and charities, here are some other exemptions from land tax in VIC.
According to the State Revenue Office (SRO) of Victoria, land is exempt from land tax in or held in trust for a friendly society. However, the exemption cannot generally be granted if the land is used for banking or insurance purposes.
To realise this exemption, you’ll need to specify how the land is used and also provide a certificate of registration with ASIC or APRA as a friendly society.
Sporting, outdoor recreation or outdoor cultural activities land owned by non-for-profits
Land owned by a non-for-profit organisation that is used for sporting activities, outdoor recreational or outdoor cultural activities is exempt from land tax. However, keep in mind that the exemption is not provided to an organisation that promotes horse racing in VIC.
Failing this exemption, a discounted rate of 5% of the value of the land may apply.
To apply for this exemption, you’ll need to supply the following:
- The body’s constitution
- The body’s Rules of Association
- The body’s recent financial statement
- A copy of the lease agreement
Land is exempt from land tax if it is used for one of the following services:
- An ambulance service
- A registered community health centre
- A denominational hospital
- A public health service
- A public hospital
- The Victorian Institute of Forensic Mental Health
Residential services for people with disabilities
If land is occupied as a residential service for individuals with disabilities, then it may be exempt. If only a portion of the land is used for these services, then the exemption will be allocated to that part.
To realise this exemption, you’ll need to supply details such as:
- The date in which the facility began providing services
- Details of the residential services provided on the property
- Proof that the disability service provider is the Secretary of the Department of Human Services or is registered with the Department of Human Services
Land that is occupied as a retirement village is exempt whether the village is operated for commercial or charitable purposes. If only a portion of the land is occupied for this purpose, then only a partial exemption is available.
To apply for this exemption, you’ll need to provide a range of information including:
- The date that the village was officially occupied as a retirement village
- Whether the premises is only occupied by retirees or not
- The percentage of the property that is currently occupied
- Details of the facilities offered at the premises
- A copy of the residential tenancy agreement and/or lease
- A copy of the financial statements for the past financial year
Land is exempt from land tax if it is recognised as a caravan park in accordance with the Residential Tenancies Act 1997. If only a portion of the land is used as a caravan park, then only a partial exemption will be offered.
To realise this exemption, you’ll need to provide details of:
- The date in which residents commenced occupation of caravans on the land
- The percentage of the caravan park that is used as a registered caravan park
- Any plans approved by council relevant to caravan park registration
Apart from the primary residence and the primary production exemptions, the main land tax concessions and exemptions administered by the WA include:
The concession for property developers allows land tax to be paid on the lower undeveloped value of the land, or the value of the land prior to the subdivision rather than the full subdivided value of separate lots.
For more information, view the FLT43A form Concession Application: Land Tax Payable for Subdivided Lots’ to see if you’re eligible.
An exemption is provided for land that is owned by, vested or held in trust for a charitable or benevolent institution and that is used solely for benevolent purposes.
Section 37(1) of the Land Tax Assessment Act 2002 says a charitable or benevolent institution does not include a relevant body unless a beneficial body determination in respect of that relevant body is in force.
Land may also be exempt in a number of situations, such as:
- Land used for residential purposes by individuals under the terms of a will
- Land owned by an individual and used by a disabled person related to the owner as their primary residence
- Land vested in the Crown, local government or agency of the Crown
- Land owned by a religious body and used for religious purposes
- Land used for zoological, agricultural or other public purposes
- Land used as an aged care facility
- Land owned by a non-for-profit organisation and used for the purposes of the organisation
- Land used as a caravan park
- Land used as a retirement village
While pensioners are not entitled to a concession from land tax, a war widow(er) or a veteran’s widowed mother are entitled to a concession to the extent of the first $10,000 of the total assessable value of the land.