The State Taxation Further Amendment Act 2024 received Royal Assent on 3 December 2024. The Act makes further amendments to state taxes, including the Vacant Residential Land Tax (VRLT).
Below is a summary of the main amendments relating to land tax.
Vacant Residential Land Tax
Alpine Resorts
Land in an “Alpine Resort” (such as a ski lodge) will not be subject to the VRLT.
Holiday Homes and Deceased Estates
If land is exempt from the VRLT under the holiday home exemption and either:
- the owner dies; or
- the sole shareholder in the company which owns the land dies,
then the deceased estate may be able to continue to claim the holiday home exemption until the earlier of:
- the third anniversary of the person’s death (or such further period as the SRO approves); or
- the date when the land (or the shares in the company which owns the land) are transferred out of the deceased estate to another person (such as a beneficiary under the deceased’s Will).
The land will still need to meet the other requirements for the holiday home exemption such as the land genuinely being used as a holiday home by relatives of the deceased person for at least four weeks in the calendar year immediately preceding the tax year.
Please note that the requirements for a holiday home to be exempt from the VRLT are complicated – especially where the land is owned by a company or trust. If you have any questions about whether your holiday home qualifies for the exemption, please contact us.
Prohibition on Adjustment of Land Tax: Clarification re GST
From 1 January 2024, the Sale of Land Act was amended to prohibit any sale contract providing for the adjustment of land tax at settlement where the sale price of land was below the “threshold amount”. This effectively means that the vendor must bear all of the land tax for the calendar year unless the sale price is at least the threshold amount.
For the 2024 calendar year, the threshold amount is Ten Million Dollars. Thereafter, it increases annually in accordance with the increases in CPI.
The new amendment makes clear that the “threshold amount” includes any amount of GST payable on the supply of the land under the sale contract. For example, if the purchaser must pay a sale price of $9.50 Million plus GST of $950,000 so that the total amount payable is $10.45 Million, then the contract can still provide for the adjustment of the land tax at settlement.
Land Tax Trust Surcharge and Non-Racing Clubs and Some Not-for-Profits
Land owned and occupied by a non-racing club (which is carried on exclusively for the purposes of providing for the social, cultural, recreational, literary or educational interests of its members) is already exempt from land tax.
Similarly, land owned by a non-profit organisation where both the land use and the organisation are primarily or substantially for:
- sporting activities; or
- outdoor recreational, outdoor cultural or similar outdoors activities,
is already exempt from land tax.
The new amendment – which the Government describes as a “technical” amendment – makes clear that if the land is held on trust for the non-racing club (or its members) or for the non-profit organisation (or its members) then the land will also be exempt from the trust surcharge on land tax.
Housing for the Relief of Poverty
A new exemption from land tax has been created for land exclusively used for accommodation where the land is owned, controlled or managed by a charity and provided solely for the charitable purpose of the relief of poverty.
This update does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.
