Land tax is so confusing - right ? ACT imposes land tax like other states. However the ACT Act contains a sting. In other states if you reside in your home and on the same property there is a granny flat that produces income then the title is exempt under the principle place of residence concession. But not in the ACT. The GF makes the land taxable. s15 of the ACT Land Tax Act 2004 imposes land tax based on the rented square metres as a % of the total building floorspace (not land) square metres to the land. eg 50m2 GF 180m2 house (ppor). Therefore 50/230 (21.74%) x land value is taxable. An exemption applies for Nil rental income or "nominal rent". This issue has been highlighted by a recent disclosure by ACT Govt that they datamatch ATO tax return data with their records of land tax. So if a ACT property produces rent and land tax isnt being paid a please explain arises. And unlike other states that limit arrears of land tax liabilities to a few years in the ACT its open ended.
Here is a link to s15 which has the formula for working it out LAND TAX ACT 2004 - SECT 15 Multiple dwellings
