From the 2020-21 financial year, related corporations that own land can be jointly assessed for land tax as if the land was owned by one corporation.

Related corporations

How are corporations grouped for land tax purposes?

Corporations will be considered to be related to each other for land tax purposes when:

  • control is exercised by a corporation over another/other corporations;
  • control is exercised by the same person(s) over two or more corporations;
  • control is exercised jointly by a corporation and its shareholders, who between them own more than 50% of issued share capital, over another corporation;
  • a corporation owns more than 50% of the beneficial interests/units in land subject to a fixed trust/unit trust; or
  • where 2 corporations are related, a third corporation will be grouped if it is related to at least one of them.

If you believe that your Corporate Group does not fit the grouping criteria stated above, please send an email to RevenueSAAssessment@sa.gov.au stating fully and in detail the reasons, and provide supporting documentation.

Can more than 2 corporations be related?

Yes. Where one corporation is related to another which is, in turn, related to a third corporation, all the corporations are related. This is because the first and third corporations are related to a mutually-related corporation.

This same reasoning, where corporations are linked by sharing a mutually-related corporation, is applied to relate a fourth corporation, and any subsequent corporations.

My corporations meet the definition of “related”, but do not all own land in South Australia. What does this mean for land tax?

Corporations may be related in any of the ways outlined, even if they do not all own land in South Australia.

Therefore, 2 corporations that own land in South Australia are grouped with each other if they are related to a third corporation that does not own land in South Australia.

How are related corporations assessed for land tax?

Where 2 or more corporations are related, the land they own will be assessed for land tax as if the land was owned by one corporation.

Who will receive the Land Tax Assessment for a Corporate Group?

Where related corporations are jointly assessed for land tax, a single point of contact, being one of the group members, is issued the Land Tax Assessment.

The Land Tax Assessment lists each member of the corporate group, together with the land owned by each of the related corporations and the percentage interest each corporation owns in the land being taxed.

Any member of the Corporate Group can request to change the address that their Land Tax Assessment is issued to.

To change the address the Land Tax Assessment is issued to, please use the online Lodge a Land Tax Query form (select option ‘Update billing details for Corporate Groups’). You can also elect to receive future Land Tax Assessments and correspondence by email.

How do I know how much I owe?

The land tax assessed against each parcel of land held by the members of the Corporate Group is displayed on the Land Tax Assessment.

If you are a member of a Corporate Group and would like to receive a copy of your group’s Land Tax Assessment, you can email landtax@sa.gov.au, quoting the ownership number for the Corporate Group or the name of the company you represent, and a copy of the Land Tax Assessment will be issued to you.

Can land tax be distributed between the related corporations?

Land tax levied should be distributed between the related corporations based on the value of each of the related corporations’ land holding interests.

If the Corporate Group’s land tax liability is paid by one of the related corporations, that corporation can recover a proportionate amount from each of the related corporations based on the value of each of the related corporations’ land holding interests. RevenueSA has no involvement in this.

What if land is jointly owned with a natural person or a corporation that is not related?

The land will firstly be assessed in the joint ownership and a Land Tax Assessment issued if the land is liable to land tax.

The related corporation’s share of the jointly owned land will then be combined with the site values of the related corporation group’s other land. Land tax is then calculated. The Land Tax Assessment will show the percentage interest in the land and include a deduction of any land tax assessed in the joint ownership (if applicable).

For more information see the how is land tax assessed page

Residential developments

Can corporations be exempted from being a related corporation where they hold land for the purposes of a residential development?

A corporation that is a related corporation of another corporation may apply to the Commissioner of State Taxation to be exempted from being a related corporation (whereby it is grouped and jointly assessed for land tax on the land owned by the related corporations), and to instead be treated as a single corporation for the purposes of assessment of land tax in relation to land held by the corporation.

Eligibility criteria

The Commissioner of State Taxation may only grant an application if the Commissioner of State Taxation is satisfied:

  • that the land is being held for the purpose of being developed as a residential development of more than 10 allotments or lots; and
  • as to any other matters prescribed by the regulations.

The land, which can comprise one or more parcels of land (which, in totality, must be subdivided into more than 10 allotments or lots), must be held by the one corporation, as opposed to being held by multiple related corporations.

Further eligibility criteria for exemption

The exemption only applies where the related corporation owns the land for the entirety of the development process, including the building of residences upon the individual allotments or lots. However, the corporation that owns the land does not necessarily need to be the builder of the residences upon the land, for example, third party builders can be engaged to build the residences instead.

In contrast, the exemption does not apply where a corporation owns the land for residential development, but no residences are built upon the individual allotments or lots whilst owned by the corporation. In this regard, whilst work may be undertaken to subdivide the residential allotments or lots, this work alone does not constitute the development of a residential development.

It is also the case that the owner of the land being developed as a residential development of more than 10 allotments or lots can transfer (i.e. sell) allotments or lots once completed residences have been constructed upon the allotments or lots and still be exempt from the grouping provisions pursuant to section 13J(5) whilst construction of other residences on the remaining land continues to be completed.

Land Tax Assessment

All land held by an eligible exempt corporation will still be taxable and aggregated together on a single Land Tax Assessment, but will not be aggregated with any other land held by any other member of the corporate group. While the land held by an exempt corporation will be separately assessed, the corporation will remain part of the corporate group for all other purposes, including the formation of a group of related corporations.

Apply to be exempted from being a related corporation where land is held for the purposes of a residential development

Corporations may apply to be exempted from being a related corporation where land is held for the purposes of a residential development by emailing RevenueSAAssessment@sa.gov.au including:

  • the ownership number on the Land Tax Assessment for the Corporate Group
  • the name of the corporation applying for the exemption
  • evidence that the corporation holds land that is to be, or has been, developed into more than 10 residential allotments or lots. Documentation may include, but is not limited to a copy of any planning documents
  • a copy of subdivision of land documents highlighting the original land and the residential allotments or lots
  • confirmation of the date the development commenced and expected date for completion.

Supporting documentation

Examples of supporting documentation that can be provided with an application include:

  • site plans
  • architectural drawings
  • plans or proposed plans of division
  • planning consents
  • development approvals; and
  • construction schedules, project proposals, building contracts and alike which show that residences will be built on the lots or allotments.Guide to Legislation: Land Tax - Land Held on Trust

Corporation A owns a parcel of land intended for a residential development with 15 lots.

It is a related corporation of Corporation B, which also owns land.

Corporation A applies to the Commissioner of State Taxation to be treated as a single corporation for land tax purposes.

The development plan involves subdividing the land into 15 lots and building residences on each one. Corporation A will maintain ownership of the land throughout the building of residences on each allotment.

Consequently, the Commissioner of State Taxation is satisfied that the land is being held for the purpose of being developed as a residential development of more than 10 allotments or lots and grants the application, allowing Corporation A to be treated as a single corporation for land tax purposes, separately from Corporation B.

Corporation C owns two parcels of land which it plans to subdivide into 12 allotments. Corporation C will only own the land until the subdivision is complete and plans to sell the subdivided allotments as vacant and does not intend to build residences upon the allotments.

It is a related corporation of Corporation D, which also owns land.

Corporation C applies to the Commissioner of State Taxation to be treated as a single corporation for land tax purposes.

In this instance, the Commissioner of State Taxation cannot be satisfied that the land is being held for the purpose of being developed as a residential development of more than 10 allotments or lots, as the requirement that residences be built upon the allotments whilst owned by the corporation prior to their sale will not be met, such that the application cannot be granted.

As such, Corporation C is not treated as a single corporation for land tax purposes and remains a related corporation of Corporation D and they are jointly assessed for land tax on the land they own.

Term and extension of exemption

An exemption granted on an application will be for an initial term specified by the Commissioner of State Taxation in the instrument of exemption (which will be based on the expected development period but may not exceed a period of 5 years).

The initial term of an exemption may be extended for a further period if the Commissioner of State Taxation is satisfied that the residential development of the land is occurring over a reasonable period in the circumstances.

An exemption will cease if the Commissioner of State Taxation determines that:

  • the development has been substantially completed; or
  • the development has not been substantially commenced within the period of 2 years after the grant of the application (or such longer period as the Commissioner of State Taxation may allow).

Land held on trust

What happens when corporations are controlled by the same trustee for different trusts?

If a trustee holds a controlling interest in any corporations on behalf of different trusts, the corporations are not related as a result of the controlling interest.

For further information, please refer to the Guide to Legislation: Land Tax - Related Corporations and the Guide to Legislation: Land Tax - Land Held on Trust.

What if the corporation owns land as trustee of a trust?

Where a corporation is the owner of land as trustee of a trust (other than a trust arising because of a contract to purchase or acquire an estate or interest in the land), the trustee will be assessed for land tax on the whole of the land subject to the trust as if the land were the only land owned by the trustee.

This means that where the land is held on trust, the taxable value of that land:

  • is aggregated with the taxable value of other land subject to the same trust; but
  • not with other land owned by the same taxpayer that is not subject to the same trust.

Land owned by a corporation as trustee of a trust is liable for land tax at the trust rates and is subject to the trust provisions, except in specified circumstances.

For further information, please refer to the Guide to Legislation: Land Tax - Related Corporations and the Guide to Legislation: Land Tax - Land Held on Trust.  Trusts do not include trusts set up for the purchase/sale of a home.

What if a corporation is also a beneficiary or unit holder of a trust?

Where a corporation owns land and is a beneficiary/unitholder of a fixed or unit trust (and so is treated as an owner of the land on trust for land tax purposes) and the corporation is also related to another corporation which owns land, the corporations will be assessed jointly for land tax purposes.

If the trustee of the trust notifies of the beneficial interest/unitholdings, the trustee may be assessed at general land tax rates, rather than trust land tax rates. The corporation which is a beneficiary/unitholder will be considered the owner of the trust land.

For further information on nomination of beneficiaries/unitholders and ownership, please refer to the Guide to Legislation: Land Tax - Related Corporations and the Guide to Legislation: Land Tax - Land Held on Trust.

As the corporations are related, the land owned by the 2 related corporations are jointly assessed for land tax as if it were owned by a single corporation. This will include the land held on trust.

In this situation, both corporations would be equally responsible for ensuring the full amount of land tax is paid.

Trusts do not include trusts set up for the purchase/sale of a home.

What if I am trustee of shares in a corporation on behalf of a beneficiary?

In relation to fixed trusts only (for example, bare trusts), a trustee and a beneficiary of the fixed trust are taken to hold the shares (or exercise power over a corporation) equally.

This is not the case for trustees and beneficiaries of discretionary trusts and trustees and unitholders for unit trusts.

Trusts do not include trusts set up for the purchase/sale of a home.

More information

Guide to Legislation: Land Tax - Related Corporations

Guide to Legislation: Land Tax - Land Held on Trust

Contact us