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.
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 posted 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.
Should a Corporate Group want to change the postal address that their Land Tax Assessment is issued to, a representative of the group can do so by completing the Lodge a Land Tax Query form (select option Update billing details for Corporate Group).
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 email@example.com, 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
Can corporations be de-grouped where they hold land for the purposes of a residential development?
Corporations are able to apply to be de-grouped where they hold land for the purposes of a residential development of more than 10 allotments or lots.
This will apply for a period based on the expected development period, but will not exceed an initial period of more than 5 years.
The development must also commence within 2 years of the grant of the application, or a longer period determined by the Commissioner of State Taxation.
How do corporations apply to be de-grouped where they hold land for the purposes of a residential development?
Corporations may apply to be de-grouped 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.
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.
Guide to Legislation: Land Tax - Related Corporations
Guide to Legislation: Land Tax - Land Held on Trust
When contacting us please provide your ownership number and assessment number. You can find these numbers on your Land Tax Assessment (previously known as a Notice of Land Tax Assessment).
|online||complete a land tax assessment query form|
|phone||(08) 8226 3750, select option 2|
|fax||(08) 8207 2100|
|post||GPO Box 1647, Adelaide, SA 5001|
You can reach us during business hours: 8:30am - 5:00pm (South Australian time), Monday to Friday (excluding public holidays).
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