Land Tax to the Former Home
When a person moves into residential aged care this may leave their home vacant or available as an investment property, and land tax may start to apply to the former home.
The rules and rates of land tax vary in each State or Territory. In most cases, land tax is based on the value of land only (not buildings). Some states calculate land tax on a calendar year, others calculate on a financial year. Land Tax does not apply at all in the Northern Territory (NT).
If the property is used as the home of the owner and/or their spouse, land tax generally does not apply. Other exceptions may also apply.
This information provides a quick summary of land tax implications for a person moving into residential aged care. It does not cover all rules or exemptions for land tax.
Please refer to the Land Titles Office in your relevant state to determine the implications for land tax.
ACT Land Tax
Land tax is applied to all residential property that is rented (for any form of consideration). Land tax is applied at a fixed base rate plus a percentage of taxable land value. It is assessed quarterly on 1 July, 1 October, 1 January and 1 April.
Land tax is based on a fixed charge of $1,326 plus a valuation charge. The valuation charge is calculating by using a rating factor to the average unimproved value of the property (AUV). This is the average of the property’s unimproved value over the previous 3 years. The rating factors are listed below:
|
Total taxable land value |
Land tax rate |
|---|---|
|
$0 – $150,000 |
0.52% |
|
$150,001 – $275,000 |
$780 plus 0.62% of the part of the base value that is more than $150,000 |
|
$275,001 – $2,000,000 |
$1,555 plus 1.10% of the part of the base value that is more than $275,000 |
|
$2,000,001 and over |
$20,530 plus 1.12% of the part of the base value that is more than $2,000,000 |
Ultimately, the formula used to calculate the land tax payable = fixed charge + (AUV x rating factors)
Exemptions/concessions:
- Land tax may not apply on the former home for up to two years after moving out of the home, if the owner is unable to live independently and moves into an assisted living arrangement (e.g. residential care, hospital or with a carer who is eligible for the Centrelink carer payment). To receive this exemption the home must not be rented.
- Exemptions may apply on land used for primary production.
- Rented property that, at the times of assessment, is vacant will still have land tax applied unless the property was vacant for the whole quarter and notification has been provided to the Commissioner for ACT Revenue.
- The commissioner for ACT Revenue may approve an exemption for up to one year on compassionate grounds if a person is temporarily absent due to a compelling reason.
- Exemptions may also apply on residential land owned by a trustee of a deceased estate which is occupied by a life tenant.
- Exemptions may apply on residential land owned by a trustee or a guardian on behalf of a person with a legal disability.
NSW Land Tax
Land tax is applied for the full year following the taxing date of 31 December, and no pro-rata calculation applies.
|
Total taxable land value (2020/21) |
Land tax rate |
|---|---|
|
$0–$733,999 |
Nil |
|
$734,000 |
$100 plus 1.6% on value between this threshold and the premium threshold |
|
Over $4,488,000 (premium threshold) |
$60,164 for the first $4,488,000 plus 2% of excess |
Note: NSW land tax rates are found at Land Tax Act 1956- Schedule 13.
Exemptions/concessions:
- Land tax may not apply on the former home for up to six years after moving out of the home, provided the client had lived there for at least six months and does not move into another home that they own, for example, they move into residential aged care. To receive this exemption the home must not be rented out for more than 6 months in a calendar year.
- Exemptions may apply on land used for primary production.
- If the property was the principal place of residence of a deceased person, it may be exempt from land tax for up to two years after the date of death or until the ownership is transferred.
- If a person has a life interest from a deceased estate to occupy a home, that home may be exempt from land tax. The same applies if a person who had been living with the owner (before his/her death) is given permission by the executor to continue living in the home.
Note: exemptions may not apply if the home is owned by a company or trust.
Queensland Land Tax
Land tax is applied for the full year following the taxing date of 30 June, and no pro-rata calculation applies.
|
Total taxable land value (at 30 June 2020) |
Land tax rate |
|---|---|
|
$0–$599,999 |
Nil |
|
$600,000–$999,999 |
$500 plus 1% of excess above $600,000 |
|
$1,000,000–$2,999,999 |
$4,500 plus 1.65% for excess above $1,000,000 |
|
$3,000,000–$4,999,999 |
$37,500 plus 1.25% for excess above $3,000,000 |
|
$5,000,000-$9,999,999 |
$62,500 plus 1.75% for excess above $5,000,000 |
|
$10,000,000 or more |
$150,000 plus 2.25% for excess above $10,000,000 |
Note: Qld land tax rates are found at Land Tax Act 2010 – Schedule 1.
Exemptions/concessions:
- If the person is no longer able to live independently and requires full-time care in hospital as a patient, in a residential aged care facility or with a carer who provides full-time care (conditions apply). To receive this exemption the home must not be rented out for more than 6 months in a financial year.
- If held in a trust an exemption may be claimed if all the beneficiaries use the land as their home.
- Exemptions may apply on land used for primary production.
- If a new home has been purchased but the previous home has not yet sold a transitional exemption may apply if one of the properties is occupied as the principal home and no rent is received.
Victorian Land Tax
Land tax is applied for the full year following the taxing date of 31 December, and no pro-rata calculation applies.
|
Total taxable land value (at 31 December 2019) |
Land tax rate |
|
< $250,000 |
Nil |
|
$250,000 to < $600,000 |
$275 plus 0.2% of excess above $250,000 |
|
$600,000 to < $1,000,000 |
$975 plus 0.5% of excess above $600,000 |
|
$1,000,000 to < $1,800,000 |
$2,975 plus 0.8% of excess above $1,000,000 |
|
$1,800,000 to < $3,000,000 |
$9,375 plus 1.3% of excess above $1,800,000 |
|
Over $3,000,000 |
$24,975 plus 2.25% of excess above $3,000,000 |
Note: Vic land tax rates are found at Land Tax Act 2005 – Schedule 1 (Table 1.4).
Exemptions/concessions:
- Exemptions may apply on land used for primary production (e.g. farm) or for business use.
- If the person is no longer able to live independently and requires full-time care in hospital as a patient, in a residential aged care facility or with a carer who provides full-time care (conditions apply). To receive this exemption the home must not be rented out for more than 6 months in a calendar year.
- If held in a trust an exemption may be claimed by beneficiaries who use the land as their home.
- If the owner dies and was using the home as their principal place of residence, an exemption may continue to apply for up to three years from the date of the death or until the land is transferred to another person.
Effective 1 January 2020, a 2% absentee owner surcharge on land tax applies for absentee owners. An absentee individual is someone who is not an Australian citizen or permanent resident, does not usually reside in Australia and was absent from Australia:
- On 31 December of the year prior to the tax year, or
- For more than 6 months in total in the calendar year.
South Australian Land Tax
Land tax is applied for the full year following the taxing date of 30 June, and no pro-rata calculation applies.
|
Total taxable land value (2020/2021) |
Land tax rate |
|---|---|
|
Up to $450,000 |
Nil |
|
$450,000 to $723,000 |
$ 0.50 for every $100 or part of $100 above $450,000 |
|
$723,001 to $1,052,000 |
$ 1,365 plus $1.25 for every $100 or part of $100 above $723,000 |
|
$1,052,001 to $1,350,000 |
$ 5,744.50 plus $2.00 for every $100 or part of $100 above $1,052,000 |
|
Over $1,350,000 |
$11,437.50 plus $2.40 for every $100 or part of $100 above $1,350,000 |
Note: SA land tax rates are found at The SA Government Gazette, Land Tax Act 1936 s8A
Exemptions/concessions:
- After a move into residential care, the home will no longer be exempt from land tax. However, relief may be available for the first financial year following the move into care. For example, John moves into residential care on 1 May 2020. On 30 June 2020 his home will no longer attract a land tax exemption. However, relief from land tax on his home may be granted for the 2020/2021 financial year.
- The full exemption for the principal home may continue to apply even if up to 25% of the total floor area is used for business/commercial purposes.
- Exemptions may apply on land greater than 0.8 hectares that is used for primary production (satisfaction must be met by the Commissioner of State Taxation). The land must be situated outside the “defined rural area” of the state (i.e. predominately outside the greater metropolitan areas of Adelaide and Mt Gambier).
Western Australian Land Tax
Land tax is applied for the full year following the taxing date of 30 June, and no pro-rata calculation applies.
|
Total taxable land value (at 30 June 2020) |
Land tax rate |
|---|---|
|
$0 – $ 300,000 |
0 |
|
$300,001 – $420,000 |
$300 |
|
420,000 – $1,000,000 |
$300 plus 0.25% of excess above $420,000 |
|
$1,000,000 – $1,800,000 |
$1,750 plus 0.90% of excess above $1,000,000 |
|
$1,800,000 – $5,000,000 |
$8,950 plus 1.80% of excess above $1,800,000 |
|
$5,000,000 – $11,000,000 |
$66,550 plus 2.00% of excess above $5,000,000 |
|
Over $11,000,000 |
$186,550 plus 2.67% of excess above $11,000,000 |
Note: WA land tax rates are found at Land Tax Act 2002 s 5 (Table 11)
Exemptions/concessions:
- For assessment years from July 1, 2020, an exemption is applied to homes owned by people who have moved into permanent full-time care in a nursing home or other facility, providing their home is not rented out.
- An exemption applies where the dominant use of the land is for primary production.
- If a new home has been purchased but the previous home has not yet sold a transitional exemption may apply for up to 12 months if one of the properties is occupied as the principal home and no rent is received from either property.
- If a person has a life interest from a deceased estate to occupy a home, that home may be exempt from land tax.
- After the death of the owner, the executor of the estate may be eligible for a land tax exemption for the following land tax year provided no rent is received from the property and it was the deceased’s principal residence.
- Property used as principal residence by a disabled person if owned by parents, grandparents or siblings.
- Land tax is exempt on the first $10,000 if the land is owned by a veteran’s surviving partner.
Note: The principal residence exemption may not apply if owned by a company or trust, unless it is held in trust for a disabled beneficiary.
Tasmanian Land Tax
Land tax is applied for the full year following the taxing date of 30 June, and no pro-rata calculation applies.
|
Total taxable land value (as at 30 June 2020) |
Land tax rate |
|---|---|
|
$0 – $24,999 |
Nil |
|
$25,000 – $349,999 |
$50 plus 0.55% on excess above $25,000 |
|
Over $350,000 |
$1,837.50 plus 1.5% on excess above $350,000 |
Note: Tas land tax rates are found at Land Tax Rating Act 2000 – Schedule 1
Exemptions/concessions:
- Exemptions may apply on land used for primary production.
- The full exemption for the principal home may continue to apply even if up to 50% of the total floor area is used for a business purposes.
- If a new home has been purchased but the previous home has not yet sold a rebate may apply if one of the properties is occupied as the principal home and no rent is received from either property.
Please refer to the Land Titles Office in your relevant state to determine the implications for land tax.