Mid Year Budget Review Land Tax Announcement
What has been announced?
From 2010-11
The Government has announced (subject to legislation being passed by Parliament), that land tax relief will be provided from 1 July 2010 by:
- increasing the tax free land tax threshold from $110 000 to $300 000;
- adjusting the subsequent land tax bracket to between $300 001 and $550 000 and introducing a tax rate for the bracket of 0.5 per cent;
- increasing the top band of the following bracket to $800 000 from $750 000; and
The top tax bracket of $1 million will remain unchanged.
The following tables show the current land tax structure and the proposed land tax structure.
Current land tax structure
Total taxable site value |
Tax applicable (%)(a) |
$0 to $110 000 |
- |
$110 001 to $350 000 |
$0 + 0.30 |
$350 001 to $550 000 |
$720 + 0.70 |
$550 001 to $750 000 |
$2 120 + 1.65 |
$750 001 to $1 000 000 |
$5 420 + 2.40 |
Over $1 000 000 |
$11 420 + 3.70 |
Land tax structure to apply from the 2010-11 land tax assessment year
Total taxable site value |
Tax applicable (%)(a) |
$0 to $300 000 |
- |
$300 001 to $550 000 |
$0 + 0.50 |
$550 001 to $800 000 |
$1 250 + 1.65 |
$800 001 to $1 000 000 |
$5 375 + 2.40 |
Over $1 000 000 |
$10 175 + 3.70 |
(a) Tax rates apply to the excess above the lower limit of the taxable site value range.
From 2011-12
From 2011-12 the Government will increase the proposed land tax thresholds in line with the Valuer-General’s annual assessment of average land value increases.
How will the Valuer General calculate the average increases in land values?
The Valuer General will determine the average increase in site values relevant to land tax consistent with the valuation roll adopted each June 30 for rating and taxing purposes as per the Valuation of Land Act 1971.
What does relevant to land tax mean?
Primary production land is exempt from land tax. Thus the average increase in site values will relate only to residential (including vacant allotments), commercial and industrial land.
What happens if property prices fall?
Thresholds will remain unchanged –they will not be reduced. However thresholds will not be increased in the subsequent year(s) until the fall has been recovered.
Will the Land Tax Act need to be amended?
The Act will need to be amended for both the threshold changes and the indexation measures. This will mean that legislation will need to be passed by Parliament.
Who will benefit from the threshold increases and rate changes?
It is estimated that around 121,300 ownerships will benefit from the proposed relief package, with around 74,500 ownerships no longer liable for land tax in 2010-11.
Land tax relief of up to $1,245 will be provided for remaining land tax payers.
2010-11 Land value ($) |
Tax payable |
Value of relief ($) |
|
Current rates and thresholds ($) |
Proposed rates and thresholds ($) |
||
110,000 |
0 |
0 |
0 |
150,000 |
120 |
0 |
120 |
200,000 |
270 |
0 |
270 |
250,000 |
420 |
0 |
420 |
300,000 |
570 |
0 |
570 |
350,000 |
720 |
250 |
470 |
400,000 |
1,070 |
500 |
570 |
450,000 |
1,420 |
750 |
670 |
500,000 |
1,770 |
1,000 |
770 |
550,000 |
2,120 |
1,250 |
870 |
600,000 |
2,945 |
2,075 |
870 |
650,000 |
3,770 |
2,900 |
870 |
700,000 |
4,595 |
3,725 |
870 |
750,000 |
5,420 |
4,550 |
870 |
800,000 |
6,620 |
5,375 |
1,245 |
850,000 |
7,820 |
6,575 |
1,245 |
900,000 |
9,020 |
7,775 |
1,245 |
950,000 |
10,220 |
8,975 |
1,245 |
1,000,000 |
11,420 |
10,175 |
1,245 |
1,500,000 |
29,920 |
28,675 |
1,245 |
2,000,000 |
48,420 |
47,175 |
1,245 |
2,500,000 |
66,920 |
65,675 |
1,245 |
3,000,000 |
85,420 |
84,175 |
1,245 |
3,500,000 |
103,920 |
102,675 |
1,245 |
4,000,000 |
122,420 |
121,175 |
1,245 |
4,500,000 |
140,920 |
139,675 |
1,245 |
5,000,000 |
159,420 |
158,175 |
1,245 |
5,500,000 |
177,920 |
176,675 |
1,245 |
6,000,000 |
196,420 |
195,175 |
1,245 |
6,500,000 |
214,920 |
213,675 |
1,245 |
7,000,000 |
233,420 |
232,175 |
1,245 |
7,500,000 |
251,920 |
250,675 |
1,245 |
8,000,000 |
270,420 |
269,175 |
1,245 |
8,500,000 |
288,920 |
287,675 |
1,245 |
9,000,000 |
307,420 |
306,175 |
1,245 |
9,500,000 |
325,920 |
324,675 |
1,245 |
10,000,000 |
344,420 |
343,175 |
1,245 |
This page was last reviewed 5 April, 2011
