Posted on Thursday, October 27th, 2011 in by Matt Garmony
What Land is Taxable?
Taxable land is land you owned at 30 June 2011, excluding exempt land. Examples of taxable land include:
• vacant land;
• residences which are not used by the owners as their primary residence;
• ‘secondary’ residences such as holiday homes, holiday units or hobby farms;
• rental homes or units;
• commercial properties including shops, offices and factories;
• land held in trust or owned in a company name;
• entitlement to land under any lease or licence from the Crown;
• land used for business, commercial, professional or trade purposes under arrangements with the Crown, Crown instrumentalities, local authorities or public statutory bodies.
Who is liable to pay land tax?
If, at midnight 30 June 2011, you owned land (excluding exempt land) with an aggregated taxable value in excess of $300,000, you are required to pay land tax for the 2011-12 assessment year. An ‘owner’ includes:
• a person who holds the freehold title to land;
• a person who holds land in trust;
• a person who leases land from the Crown or local government (lessee);
• a person deemed to be the owner because he or she is in possession of the land and that possession is in accordance with the agreement for the sale of land between vendor and purchaser.
What is land tax and metropolitan region improvement tax (MRIT)?
Land tax is an annual tax on land and is a source of general revenue for the Government of Western Australia. It assists in the funding of such services as education, health, and law and order.
MRIT is an annual tax on land in the metropolitan region. The metropolitan region includes the following local governments: Armadale, Bassendean, Bayswater, Belmont, Cambridge, Canning, Claremont, Cockburn, Cottesloe, East Fremantle, Fremantle, Gosnells, Joondalup, Kalamunda, Kwinana, Melville, Mosman Park, Mundaring, Nedlands, Peppermint Grove, Perth, Rockingham, Serpentine-Jarrahdale, South Perth, Stirling, Subiaco, Swan, Victoria Park, Vincent and Wanneroo. This is a special purpose tax used to finance the cost of providing land for roads, open spaces, parks and similar public facilities
Calculation of Land Tax and MRIT
Land tax and MRIT are calculated on the aggregated taxable value of all land held in the same ownership (excluding exempt land) at midnight on 30 June. Since July 2009, any increase in an unimproved valuation of an individual land item has been capped to a maximum of 50% of the previous year’s valuation. The unimproved value of land is its market value under normal sales conditions, assuming that no structural improvements have been made. Land within the Perth Metropolitan Region and town sites throughout Western Australia is assessed on the site value basis which includes merged improvements such as drainage, filling, excavation, grading and retaining walls. Each year, the Valuer General determines the unimproved values for all land in the State.
The unimproved value that applies to land for land tax and MRIT assessment purposes for the 2011-12 assessment year was determined by the Valuer General as at the date of valuation being 1 August 2010. This means that, in determining the unimproved values to be used for the 2011-12 land tax assessments, the Valuer General was required to consider sales evidence falling within a time period around 1 August 2010 and not at the date of assessment for land tax, being 30 June 2011.
The amount of land tax payable is calculated by applying the appropriate rate of tax to the aggregated taxable value of taxable land in the same ownership. For example, if you owned two taxable properties with taxable values of $200,000 and $300,000 respectively, the tax is assessed on $500,000 at the rate shown in the following table. Generally, only land owned by the same owners is aggregated. For example, land that is owned solely by you is not usually aggregated with land you own jointly with another person, or with land that you have an interest in through a company or trust. In such circumstances, a separate assessment notice is issued. Please click the link to our Land Tax calculator on the Garmony Property Consultants website to estimate your land tax payable.
Objection if I think the assessment is incorrect
Lodgement of an objection does not affect the liability for payment of your assessment by the due date. Before lodging an objection against your assessment you should contact Land Tax on (08) 9262 1500, as it may be possible to resolve your enquiry over the phone. An objection against your assessment must:
• be lodged within 60 days of the date of issue shown on your assessment notice;
• be in writing with the word ‘OBJECTION’ clearly written at the top of the letter;
• include the lot number, street address of the property, and the name of the local government authority; and
• state fully and in detail the grounds of your objection and provide a daytime contact number.
When making an objection to your land tax, it is very important to have evidence to back up your argument. Obtaining the services of a licensed valuer to do a valuation of you property and provide advice is one of the services that Garmony Property Consultants offer. Please contact us if you have any issues regarding your land tax assessment.
For further information – or to download either a guide to valuations and/or an objection form – or go to www.landgate.wa.gov.au.
Please lodge your objection with:
Commissioner of State Revenue
Office of State Revenue
GPO Box T1600
Perth WA 6845
Further information on unimproved valuations can be obtained by visiting the Landgate website at www.landgate.wa.gov.au.