Your principal place of residence is exempt as is land used for primary production.
All other land that is owned at midnight on 31 December is taxed. The first $549,000 is tax free. The tax on the excess of this number is 1.6% plus $100. If the value is over $3,357,000 then the tax is 2% over this amount plus $45,028.
It is the responsibility of the landowner to lodge the first return and thereafter the Office of State Revenue will send you the Notice of Assessment automatically.
Rules for foreigners buying property: if you’re a “foreign person” owning residential property then there is a flat land tax of 0.75%. This is besides an additional stamp duty on purchase of 4%.
When buying property, care needs to be taken with the ownership structure and this can be an important time to seek advice!
For example if a couple buy in their joint names two investment properties with land value of $500,000 each then land tax will be payable, but if they buy each property in their individual names, then no land tax will be payable.
Beware of family trusts when it comes to property. They are not entitled to the threshold. If they are the owners of units in a unit trust that owns property, the unit trust may be exempt but the family trust will still be subject to land tax.
In respect of the new land tax on foreign persons, a family trust which could have a foreign person as a beneficiary will also be subject to this 0.75% tax even if the foreigner is never made a beneficiary.
We can arrange for your trust deeds to specifically exclude such “foreign persons” but this must be done before 31 December.