22 November, 2020
This is an important post - please read and forward to whomever you think needs to see it.
It's on the topic of Land Tax. It is complicated and many may not be aware because the current nature of their current zones so please bear with me with the preamble.
Land tax is calculated on the total Unimproved Value of landholdings, as determined by the Valuer General (the same as the ad valorem portion of our rates) in NSW. If over a threshold ($734,000 in 2020) you are charged an amount by the NSW Government.
You don't, generally, pay land tax on:
- your home, known as your principal place of residence
- your farm, known as primary production land
- any land you own with a cumulative total taxable value below the land tax threshold.
The Rural Lands definition is land zoned either 'rural' (RU1-RU6), 'rural-residential' (R5) or 'non-urban' (Business or Industrial). Everything else, by exception, falls into the residential category. Land Tax is applied to 'residential' land, with or without a dwelling.
For land NOT zoned in the 'rural land' groups above, an exception can be applied if the land is primarily used for primary production and the nature is of significant and substantial commercial purpose or character.
Why does this become a problem?
If your lot/holding is being rezoned to an E-Zone, and you can not satisfy the tests or apply for another exception (like primary residence), chances are your land will be subject to land tax.
If you have a 'weekender' or hobby farm, with a soon-to-be E-Zone, this wont satisfy the tests.
Land tax also doesn't provide for 'existing use rights'. That is, if you have previously had an exception for primary production and your lot/holding is re-zoned, that exception wont carry forward unless you satisfy the tests and meet the definition of 'significant and substantial'.
Keep in mind there is a lot more information and definitions than what I can include in this post without it becoming even more of a novel. Make sure you check the information to determine if it will impact you based on your circumstances.
This one is the overview of Land Tax: Land tax | Revenue NSW
This link details the what primary production is for land tax, the Commercial Tests, and zones and re-zoning key points: Land used for primary production | Revenue NSW
This link is information for Exceptions and Concessions: Exemptions and concessions | Revenue NSW