What is land tax? According to the State Revenue Office of Victoria, Land Tax is defined as “an annual tax based on the total taxable revenue of all land owned in Victoria by a taxpayer”. Land tax is assessed each calendar year and relies on the council site value. Land tax applies to properties that are used for investment or commercial purposes, holiday homes and vacant land, regardless if the land is owned by an individual or a multiple groups but doesn’t apply to owner occupied properties or properties whose value is less than $250,000.
Joint ownership of land is when more than one individual owns the same piece of land. It is important to understand the differences with joint ownership as different rules and regulations apply and it also affects land tax. So how is joint land assessed? Firstly, joint-owned lands are initially assessed as if they were owned by a single individual. Once this assessment has completed, a second assessment takes place for each party in the joint ownership to conclude their total land interest.
The joint-ownership assessment will be issued to one of the owners of the land, not all. The groups can nominate an individual to receive the assessment request or the State Revenue Office will randomly select one party. However, it is important to note that even though only one party receives the notice, all landowners are responsible for the land tax and assessment.
There is a joint ownership deduction that parties may be eligible for: “The deduction is the lesser of either the individual owner’s share of the tax paid in the joint ownership assessment or the amount of tax calculated in the individual assessment for the share of the jointly owned land”.
For more information on land tax and joint ownership of land, please contact Solid Investment Property on (03)9690 2666