Land tax assessments are typically issued in January to March of a calendar year assessing land owned by a taxpayer at midnight on 31 December of the preceding calendar year.
Can an objection be lodged against a land tax assessment?
Yes, you can certainly object to your land tax assessment. Taxpayers can object if they are dissatisfied with the land tax assessed for various reasons.
Importantly, taxpayers should be aware that they have a 60-day window to lodge an objection with the respective revenue offices, such as the State Revenue Office of Victoria, or Revenue New South Wales.
On what grounds can you object?
These are some of the more common grounds of objection that can be raised in an objection:
- Incorrect land value The quantum of land tax payable on a land is based on its "site value". Site value is the value of the land not including any improvements (eg. buildings, dwellings) on the land. If the site value of land is more than what you believe it should be, a valuation objection can be lodged with the respective revenue office.
- Land is exempt land or eligible to a
concession There is a range of land tax
exemptions/concessions that could apply, the application of which
will depend on your circumstances. Taxpayers are able to object to
land tax assessments on the basis that the following
exemptions/concessions apply:
- Principal place of residence
- Construction and renovation
- Primary production land
- Charitable land
- Land owned by non-profits
- Rooming houses
- Caravan parks
- Retirement villages
- Land tax grouping not applicable Land tax issued to certain taxpayers can be issued based on lands held by other taxpayers under the land tax grouping provisions. If you believe your land should not be grouped with lands held by other taxpayers, an objection to the aggregated land tax for the grouped entities can be lodged.
- Absentee owner surcharge not applicable The absentee owner surcharge (AOS) applies if a taxpayer is considered an absentee owner. AOS does not apply if you are not an absentee owner and you can object to the imposition of AOS if you believe you are not an absentee owner. In addition, even if you are an absentee owner, there is avenue to object to the imposition of AOS on the basis of certain further grounds provided in the land tax legislation.
- Vacant Residential Land Tax not applicable The vacant residential land tax (VRLT) applies if residential land was vacant for 6 months are more in the preceding calendar year. Our recent article sets out some of the recent changes to VRLT introduced by the Victorian Government. VRLT can be objected to if land was not vacant for 6 months or more and if you are eligible to any of the VRLT exemptions, including any applicable land tax exemptions.
- Land sold before liability date The liability date of land tax is midnight on 31 December in the preceding calendar year. If a taxpayer is not the legal owner as at the liability date, the taxpayer is not required to pay land tax on the land and can object to the imposition of land tax for that year.
- Incorrect ownership While you may be the owner of land, it is important to ensure that the land tax assessed accords with the ownership of the land, especially when there are joint owners. At times, land tax may also be issued to the wrong entity (eg. family trust) when land is held by an individual(s). An objection should be lodged in all instances where the land tax liability does not accord with the correct ownership of the land in question.
- Incorrect land Land tax assessments crystalise a land tax liability and should only apply to land(s) that are owned by a taxpayer as at midnight on 31 December of the preceding calendar year. When land is subdivided, the size of land will reduce and typically this should lead to a reduction of land tax payable on the original parent title (assuming no rezoning or other changes have led to an increase in land value). An objection should be lodged if a land tax assessment incorrectly assesses land based on the original parcel of land and does not take into account any subdivision or other changes to the land description which would typically be understood to reduce the site value of land and resultingly, the taxable value of land.
- Trust surcharge not applicable Land owned by a trust is typically liable to a higher rate of land tax due to the land tax trust surcharge. At times, land tax assessments may incorrectly assess a taxpayer based on land being held under a trust when it should be issued to an individual(s) or company in their own right. Separately, while land may be owned by a trust, if trust notifications have been provided to the revenue authority, the trust surcharge may not be applicable. An objection should be lodged to ensure not only that the land tax liability is assessed to the correct taxpayer but also so that the trust surcharge is not assessed when it should not apply.
Queries on land tax assessments and objections
In addition to the above we can assist with any other state or federal based tax queries you have. Objecting to land tax needs should be handled carefully to ensure your case is expressed clearly with proper consideration in order to get the best outcome.
Our state taxation lawyers can provide clear guidance on how to ensure that your objection rights are preserved and you present to the revenue authorities a cogent case addressing all applicable grounds of objection.
If you have been assessed for land tax and require further information as to your objection rights, we can provide clear legal advice on your options and lodging an objection.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
