Definition of terms—Land tax

A

Allowable letting

An allowable letting is an arrangement where each of the following applies:

• the land is used as the home of a person (the principal resident)
• the principal resident has given the occupant the right to live on the land under a tenancy agreement
•  the gross floor area of the residential area to which the right relates (the leased area) is not more than 50% of the total floor area of all residential areas on the land
• the occupant uses the leased area for residential purposes and has not given the right to occupy any part of the leased area to another person under a tenancy agreement
• the rent payable for the leased area is not more than the market rent for the area.

Note: It is not an allowable letting if the leased area is in a building containing 3 or more flats and the leased area is not used for residential purposes by the principal resident.

Averaging of values

When 3 years of LVA values at 30 June (current and previous 2 years) are available, the averaged value will be used to calculate land tax. Where 3 years of LVA values at 30 June are not available, the state-wide averaging factor will be used to calculate land tax. Averaging is used to calculate the taxable value in most cases.

A full definition can be found in section 18 of the Act.

B

C

Capping/capped value

Capping ensures that the taxable value of land will be no more than 150% of the taxable value for the previous financial year.

A full definition can be found in section 18A of the Act.

D

E

Exempt purposes

A purpose will be exempt if it comprises:

• religious or educational activities (including kindergartens)
• caring for the sick, aged, infirm, afflicted or incorrigible people
• relieving poverty
• full-time care for children by protecting their wellbeing and giving them food, clothing and shelter
• promoting the public good
• another charitable or public benevolent purpose
• providing a residence to a minister or member/s of a religious order conducting a previously listed activity.

 

A full definition can be found in section 46 of the Act.

F

Freehold land

Freehold land is land that is not leased from the Crown (government).

G

H

Home

A person's principal place of residence is their home.

Part 6 Division 1 of the Act describes when land is used as a person's home.

I

J

K

L

Land

For land tax purposes, land includes:

• vacant land
• land that is built on
• lots in building unit plans
• lots in group title plans
• lots in a time share scheme
• lots owned by a home unit company.

Liability

A person’s liability is their obligation or debt in accordance with the Act.

Part 2 of the Act discusses a person’s liability for land tax.

LVA value

A LVA value of land is a valuation issued under the Land Valuation Act 2010.

M

Moveable dwelling park

A moveable dwelling park is a place where caravan or manufactured home sites can be rented or leased (e.g. caravan parks).

A full definition can be found in section 54 of the Act.

N

O

Owner

An owner of land is a person who is taken to be the owner of the land under the Act. This includes a person who is:

• entitled to possession of a freehold estate in the land, solely or with others

or

• entitled to receive rents and profits from the land, solely or with others.

Generally, this is the person on the certificate of title as at 30 June each year.

For a full definition, see Schedule 4 of the Act.

P

Possession date

The possession date for ownership is the date that actual possession of land passes to the new owner. This is usually, though not always, settlement.

An explanation can be found in section 11 of the Act.

Primary production

Primary production refers to the business of agriculture, pasturage or dairy farming.

Principal place of residence

A person's home is their principal place of residence.

Part 6 Division 1 of the Act describes when land is used as a person's home.

Q

R

S

Substantial non-exempt purpose

When determining whether land is being used for a substantial non-exempt purpose, the following factors are considered:

• whether a person other than the principal resident has been given a right to occupy any part of the land under a tenancy agreement
• whether a person, other than the principal resident or a member of the principal resident’s family who uses the land as his or her home, carries out work on the land as an employee or contractor, other than related to the land itself or a building situated on the land
• the extent to which a person uses the land, or has set the land aside for use, for a non-exempt purpose
• whether the gross income generated during the most recently ended financial year from business or income producing activity on the land is more than $30,000
• any other relevant matter.

Supported accommodation

Supported accommodation service means an accredited residential service.

An explanation can be found in section 51A of the Act.

T

Taxable value

The taxable value of land (for a financial year) means the lesser of:

• the LVA value of land for the financial year
  
  or
  
  
• the averaged value of land for the financial year.

Taxable value is defined in section 16 of the Act.

Tenancy agreement

A tenancy agreement includes any of the following:

• a lease or licence
• an agreement or arrangement about boarding or lodging for a person.

Threshold

The threshold is the total taxable value of land at which liability for land tax begins.

Thresholds for different types of landowner are discussed in section 32 and Schedules 1 and 2 of the Act.

U

Use requirement period

For vacant land to be exempt from taxation, the institution must use it for one or more exempt purposes within three years after acquiring the land.

The Commissioner may extend this period. See section 49 of the Act for more details.

V

W

X

Y

Z