It Depends – What land tax planning matters are there in the lead up to 30 June?

In this edition of It depends, senior associate Tom Walrut talks about some of the planning considerations for land tax purposes in the lead up to 30 June.

Video transcript

Hi, my name’s Tom Walrut and welcome to this week’s special edition of It Depends, where we’ll be looking at some of the planning considerations for land tax purposes, in the lead up to 30 June. So, what do you need to consider in the lead up to 30 June for land tax purposes? Well, as always, it depends. And it depends on the type of entity that owns the land.

What land tax planning matters are there for individuals?

So, what planning considerations are there for individuals that own land? Well, the first is, if you’ve claimed the home exemption are you still using the property as your home as at 30 June? If you’ve moved out at 30 June, you no longer get to claim the home exemption. The second major consideration for individuals are: are you still entitled to the home exemption as at 30 June in each year? So, things to watch out for there are; is there substantive business use on the property? Do you exceed the number of allowable lettings on the property? If you’ve moved into residential care, are you still entitled to the concessions available to you? And are you still entitled to any renovation and demolition concessions which you might have claimed to date?

What land tax planning matters are there for companies?

So, main things for companies are if you’ve got any new acquisitions, whether or not you can acquire those properties either in a subsidiary or in another member of the group. The main point there is that you want to spread as much as possible, the land tax over as many entities within your group. The other point there is that if you’ve got a primary production exemption that you’ve claimed, in the previous year and you’re still wanting to claim this year, you know, are your leases up to date, are your agistment agreements up to date, share farming agreements, all those sorts of things. And the other point there obviously is are you still using the property for a primary production purpose, or is a property still used for a primary production purpose? You need to have those all in place, properly up to date to ensure that you get your primary production exemption as at 30 June.

What land tax planning matters are there for trusts?

And look for trusts, the main considerations are where the trust has claimed the home exemption. So, in particular, making sure that any distributions from the trust in the year occur before 30 June and where those distributions have been made, they are only made to individuals who are using the property as their home as at 30 June. So, no trust to company distributions, no trust to trust distributions and no distributions to beneficiaries not using the property as their home. As always, we’ve got a very friendly team here at Cooper Grace Ward so, feel free to give us a call if you’ve got any land tax questions. Thanks.