Land tax is payable by the owner of a property when that property is not the person’s principal place of residence and the unimproved capital value of the property is more than $1,075,000.
The tax is calculated in respect of liable property owned at midnight on 31 December each year. This means that if a person owns a property in addition to his or her principal place of residence and if the unimproved value of that property exceeds $1,075,000, then land tax is calculated and payable on the value in excess of that threshold. If the person owns several properties, then the unimproved values are added together and after the threshold of $1,075,000 is subtracted, the land tax is calculated on the balance.
The threshold is adjusted each year. For example in 2021, the threshold was $755,000. In 2022, $822,000 and in 2023, $969,000. In the recent State budget, it was announced that the threshold shall remain at $1,075,000. It shall not be adjusted (usually increased) this year. This means that if land prices continue to increase, then if an owner of a property is liable for payment of land tax and if the property increases in value, then the amount of the land tax payable shall increase.
Please contact Cavelle Lindsay if you would like to discuss this further.
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