In Victoria, land tax exemptions under Sections 88A and 88B of the Land Tax Act 2005 provide relief for certain properties that meet specific criteria. These exemptions are designed to reduce or eliminate the amount of land tax payable on certain types of land.
Here's a detailed guide on how to claim these exemptions:
Section 88A – Principal Place of Residence (PPR) Exemption
Section 88A of the Land Tax Act 2005 provides an exemption for principal places of residence (PPR). If you live in the property as your main home, and it is not used for any income-producing purpose (e.g., rental or business), you may be eligible for this exemption.
Eligibility for Section 88A Exemption:
To qualify for this exemption, the property must meet the following criteria:
- Principal Place of Residence: The property must be your principal place of residence. This means it should be the place where you live most of the time.
- Ownership: You must own the land in question. This exemption applies to individuals (not companies or trusts), and the property must be owned by the person claiming the exemption.
- Exclusively Residential Use: The property must be used as a residence only. If you are renting out a portion of the property (such as a room or a flat), you may still be eligible for the exemption if the rented part does not exceed a certain percentage of the property’s value.
- Primary Dwelling: The land must be the primary place of residence. If you live in multiple properties (e.g., owning multiple homes), you can only claim this exemption on one property per year.
How to Claim the Section 88A Exemption:
- Complete the Land Tax Return: You must submit your Land Tax Return to the State Revenue Office (SRO) of Victoria when land tax is assessed. This is typically done annually.
- Claim the Exemption: In your return, you will need to declare that the property is your principal place of residence. The SRO will assess whether the exemption applies based on the information provided.
- Evidence: You may be asked to provide supporting evidence, such as:
- Utility bills (e.g., electricity, gas, water) showing the address.
- Electoral roll details.
- Other documents that show the property is your primary residence.
- SRO Assessment: The SRO will then review your claim and, if eligible, will grant the exemption, reducing or removing the land tax liability for the property.
Section 88B – Charitable and Religious Exemption
Section 88B of the Land Tax Act provides an exemption for land used for charitable or religious purposes. This exemption applies to properties used for purposes such as:
- Charitable organizations (e.g., hospitals, schools, charities).
- Religious institutions (e.g., churches, mosques, synagogues).
Eligibility for Section 88B Exemption:
To be eligible for the Section 88B exemption, the following conditions must be met:
- Use of Land: The land must be used for charitable or religious purposes. This can include properties used for:
- Charitable institutions (e.g., registered charities).
- Religious activities (e.g., churches, temples, and places of worship).
- Welfare, education, or other charitable uses.
- Non-Commercial Use: The land must not be used for commercial purposes (i.e., it cannot be used to generate profits for the owner or any individual).
- Ownership: The owner of the land must be a charity or religious organization that is either:
- Charity registered with the Australian Charities and Not-for-profits Commission (ACNC), or
- A religious institution recognized by the relevant religious authorities.
- Exclusive Use: The land must be used exclusively for charitable or religious purposes. If the property is partly used for commercial purposes (e.g., rented out for non-charitable purposes), the exemption may not apply.
How to Claim the Section 88B Exemption:
- Land Tax Return: As with Section 88A, you must complete your Land Tax Return. You will need to indicate that the land is used for charitable or religious purposes and specify the type of exemption you are claiming.
- Supporting Documents: You may need to provide documentation to demonstrate that the land is used for charitable or religious purposes, such as:
- Evidence of the charitable status of the organization (e.g., ACNC registration).
- Details of the land’s use (e.g., whether it’s used for worship, community activities, or charity work).
- Financial records of the organization, including details of non-commercial use.
- Assessment by the SRO: The State Revenue Office will assess your application and determine if the exemption applies.
- Ongoing Compliance: Charitable and religious organizations should ensure they continue to meet the criteria for this exemption. The SRO may periodically review the land’s use and the organization’s status to ensure eligibility is maintained.
General Tips for Claiming Land Tax Exemptions
- Timely Filing: Ensure that you file your Land Tax Return by the due date, typically December 31 each year, to avoid penalties. You can file online through the SRO's website.
- Review Property Use: Regularly review the use of your property to ensure it continues to meet the requirements for any exemption. Changes in how the land is used can affect eligibility.
- Keep Records: Keep detailed records of your property use, ownership, and any supporting documentation for exemption claims. If the SRO asks for additional information, having these records ready can speed up the process.
- Seek Professional Advice: If you are unsure whether your property qualifies for an exemption under Sections 88A or 88B, or if you have complicated circumstances (e.g., partial use for business or rental), consider seeking advice from a tax advisor or property lawyer to ensure compliance.