The New South Wales State Government in its May State Budget has yet again fiddled with the Land Tax provisions.

For the 2006 Land Tax Year i.e. Land held as at 31st December 2005) a $330,000.00 land value threshold will apply to owners of liable land. If you hold liable land which has a total land value less than $330,000.00 no Land Tax is payable for 2006.

If the liable land is the subject of a special trust (such as a discretionary trust) or is owned by a company classified as a non-concessional company, there is no threshold.

The Land Tax for the 2006 year will be 1.7% (plus $100.00) on the unimproved value of the land in excess of $330,000.00.

It is estimated that in 2006 about 350,000 property owners will not have to pay land tax giving each a saving of up to $1,320.00 per year. However, property owners who hold liable land with a value of $500,000 will each pay $790 more and those with a $1million liable land value will be paying $2,290 more than in 2005.

Remember the liable land value can be made up by owning one or more properties.

Exemptions & Concessions

There are no changes to the current land tax exemptions  - e.g. Principal place of residence). The concession for non-income earning land however will cease and will be unavailable in 2006.

* Please remember there are no changes for the 2005 Land Tax Year and all liabilities remain payable. Our April 2005 Newsletter sets out the Land Tax Rates.

For further information, please contact Paul Hayson.