• Your Assessment

     

     

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    'Reasons for receiving a land tax assessment notice'

    Reasons for receiving a land tax assessment notice

    What is land tax and who is liable?

    Land tax is imposed on Western Australian land and forms part of the Consolidated Revenue of the State. The money is used to provide essential services to the community such as education, health, public safety and law and order.

    If, at midnight on 30 June 2017, you are the owner of land (excluding exempt land) with an aggregated taxable value in excess of $300,000, you are required to pay land tax for the 2017-18 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); or
    • 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.

    NOTE: If you sell land after midnight on 30 June 2017, you are still liable to pay land tax for the 2017-18 assessment year. The Office of State Revenue does not apportion land tax and any adjustment of taxes is a private matter between the vendor and the purchaser.

    Land that you own jointly with someone else is assessed separately from any land that you own solely, and from any land that you own with any other person. For instance, if you owned one lot alone, and owned a second lot jointly with John Citizen, and a third lot jointly with Mary Citizen, each of those lots would be assessed separately.

    A person holding land as trustee is liable for any land tax assessed on that land as if the land were their own. If a trustee holds land in trust for different persons, land tax is assessed separately on the land owned for each separate trust. If a trustee holds taxable land in trust for another person and is also the beneficial owner of other land, land tax is assessed on the land held in trust separately from the land held beneficially. However, there may be circumstances that require land to be assessed jointly.

    A trustee is not exempt from land tax if he resides in the property as his principal place of residence. However, an exemption is available for a trustee (including a corporate trustee) of a trust where the property is specifically held on behalf of a disabled beneficiary who uses the land as their sole or principal place of residence.

    To qualify for this exemption, such beneficiaries must

    • be qualified for a disability support pension under the Social Security Act 1991 (Cth) Part 2.3 (whether or not they receive that pension);
    • be under 16 years of age and be cared for by a parent or guardian, within the meaning given in the Social Security Act 1991 (Cth), who is qualified for a carer payment under Part 2.5 of the Act in respect of that care (whether or not they receive that payment); or
    • be a minor who is an orphan.

    For the exemption to apply you must lodge Form FLT26 'Residential Exemption Application: Trust Property used by a Disabled Beneficiary'.

    Any person who is leasing land from the Western Australian Government, a government agency, a local government or a public statutory authority, is treated in the legislation as if they were the owner of that land, and is liable to pay land tax. Where such lease or other arrangement is terminated involuntarily before its expiry date, a rebate may be allowed in relation to the portion of the assessment year after the termination day.

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    Understanding your notice

    Land tax assessment notices are generally issued between October and January, and contain important information about your land tax liability. See Understanding Your Notice of Assessment for a detailed explanation.

     

    When is a subdivided lot assessable for land tax?

    A lot is a defined portion of land represented on a plan or diagram which has been approved by the Western Australian Planning Commission (WAPC). A newly subdivided lot is assessable for land tax from the 30 June following approval of the subdivision by the WAPC. It does not matter whether or not a certificate of title has been issued for the new lot.

    For example, if a subdivision was approved by the WAPC in May 2017 (i.e. before 30 June 2017), each of the new lots would become assessable as at 30 June 2017, with the tax being levied from and including the 2017-18 year of assessment.

    If the subdivision was approved in July 2017 (i.e. after 30 June 2017), the original lot as it existed before the subdivision would be assessable for land tax for the 2017-18 year of assessment. The new lots would become assessable as at 30 June 2018 for the 2018-19 year of assessment.

    New subdividers of residential property should view Commissioner's Practice LT 2 'Newly Subdivided Residential Property'.

    New subdividers of rural business land should view Commissioners Practice LT 3 'Newly Subdivided Residential Business Land'.

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    Identification of taxable land

    Taxable land is land you owned at 30 June, excluding exempt land. Examples of taxable land include:

    • vacant land;
    • residences which are not used by the owners as their primary residence including holiday or rental homes and hobby farms;
    • 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; or
    • land used for business, commercial, professional or trade purposes under arrangements with the Crown, Crown instrumentalities, local authorities or public statutory bodies.

     

    Valuation of property

    assessment

    Each year, the Valuer-General determines the unimproved values for all land in the State.

    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.

    For example, the unimproved value that applies to land for land tax and MRIT assessment purposes for the 2017-18 assessment year was determined by the Valuer-General as at the date of valuation, being 1 August 2016.

    This means that in determining the unimproved values to be used for the 2017-18 land tax assessments, the Valuer-General was required to consider sales evidence falling within a time period around 1 August 2016 and not at the date of assessment for land tax, being 30 June 2017. Further information on unimproved valuations can be obtained by visiting the Landgate website.

    Property owned by a trust

    Land owned in a trust capacity may be assessed separately from land owned by that party in their own right. If your assessment includes land that is held by a trust you need to advise the Office of State Revenue in writing in order to ensure that you are receiving a correctly calculated assessment.

    When advising of trust ownership you will need to provide:

    • endorsed Offer and Acceptance from the purchase of the land
    • Deed of Trust (a minimum of the schedule and execution pages)

    Land owned in a trust capacity is not eligible for a residential exemption, except where:

     

    Your rights and obligations

    You must notify the Office of State Revenue before the due date for payment shown on your assessment notice if:

    • any land you owned at 30 June has not been included on the assessment notice;
    • you have received separate assessment notices for land owned by the same person (all land in the same ownership must be included in one assessment for the purposes of aggregation);
    • you have sold the land and delivered possession of the land to the purchaser on or before midnight 30 June;
    • land that you own beneficially has been assessed together with land you own as a trustee;
    • land that you own as trustee for a trust has been assessed together with land you own as trustee for a different trust;
    • land that you own as trustee is receiving a residential exemption;
    • any land that has been exempt was not used for the exempt purpose shown on the assessment notice; or
    • your assessment notice contains any other errors or omissions.

    Record keeping

    The Taxation Administration Act 2003 imposes record keeping requirements on taxpayers. In particular, section 87 requires that a tax record must be retained for at least 5 years. View a more detailed explanation of the record keeping requirements.

    Customer Service Charter

    The Office of State Revenue operates under a customer service charter which outlines the rights and responsibilities of taxpayers and sets out the levels of service taxpayers can expect.

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    Compliance

    Audits and investigations

    The Office of State Revenue conducts audits and investigations of all taxpayers to ensure compliance with the legislation administered, and to identify risks that may impact upon compliance. To gain a better understanding of what is involved when an audit or investigation is carried out, see our audits and investigations page and please refer to the Office of State Revenue Compliance Program.

    Anonymous information

    The Office of State Revenue investigates anonymous disclosures from members of the public. Confidentiality is assured and we welcome any information about non-compliance relating to the taxes, duties and grants we administer. Anonymous disclosures can be reported by telephoning (08) 9262 1380 or using the Complaints and Feedback System.

    Anti-avoidance provisions

    Sections 45A and 45B of the Land Tax Assessment Act 2002 enable the Commissioner to make a determination that a minor (ownership) interest in a lot or parcel of land can be disregarded for the purposes of assessing land tax.

    If sections 45A and 45B of the Land Tax Assessment Act 2002 apply to you, before the Commissioner makes an assessment, you will be given the opportunity to provide all facts and circumstances that support the underlying reasons that may exist for the minor interest.

    Contact (08) 9262 1380 or email landcomp@finance.wa.gov.au for further information.

    Information exchange

    For the purpose of administering WA taxation laws, we exchange information with other state revenue offices and the Australian Taxation Office to assist the proper identification and accurate assessment of taxation liabilities. This sharing of information is carried out in accordance with section 114 of the Taxation Administration Act 2003, similar legislation in other States and Territories, and under Table 4 of section 355-65 of Schedule 1 of the Taxation Administration Act 1953 (Cth).

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