In a ground breaking win for property developers, a recent NSW
Court of Appeal decision found that land held for future
development but used for grazing, can be exempt from land tax.
The Court of Appeal's recent decision in CCSR v Metricon
QLD Pty Ltd(2016) affirmed the position that
property developers are entitled to rely on the exemption described
in s10AA of the Land Tax Assessment Act(1956) if
the land is being used for primary production.
The primary production exemption requires the dominant use of
the land to be for primary production. The Office of State Revenue
(OSR) has increasingly refused claims for the primary production
land tax exemption, for property which actually is used for primary
production, where the land is also held for future development. The
OSR's position is based on a view that the exemption does not
apply because the 'dominant use' of such land is for
'land banking' or 'land development', not for
We recommend that property developers with primary production
land review their current land tax bills, particularly if the
exemption has been previously refused by the OSR on the grounds
that the dominant use of the land is not primary production.
This also clears the way for the acquisition or continued
holding of farm land with a view for future development without the
significant holding costs associated with land tax (subject to
meeting the tests for primary production use).
Our Real Estate and Development, Zoning and Planning teams in
Australia have extensive experience in advising property developers
on acquiring land for development, land tax exemptions associated
with the primary production land tax exemption, and land tax
objections and appeals.
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A lessee will need to demonstrate that the genuine interests of the lessor will be protected if relief is granted.
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