Land Tax on non subdivided units?

Discussion in 'Accounting & Tax' started by leicachamp, 9th Jan, 2020.

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  1. leicachamp

    leicachamp Well-Known Member

    Joined:
    6th Nov, 2015
    Posts:
    56
    Location:
    Melb
    Hello

    Scenario=

    Building block of 3 units. 1 unit will be PPR. Other 2 units will be rented out. Will not be subdividing for we will be not be selling. Property is in Victoria. Will be purchased in personal name.

    Question : Can i get exemption of Land tax for all 3 units is on 1 title?

    Thanks for any input
     
  2. Paul@PAS

    [email protected] Tax, Accounting + SMSF + All things Property Tax Business Plus Member

    Joined:
    18th Jun, 2015
    Posts:
    15,654
    Location:
    Sydney
    You may not be compliant with state strata laws. These require a registered strata plan when there are 2 or more property units on one title. Council will likely require that as a condition for development approval. In which case each strata entitlement is then assessed on its own land tax, rates and possibly (not always) services such as water, gas and electricity. Insurers will also require that the body corporate hold the property insurance. The strata will also need to charge levies to cover the insurance, maintenance etc incl the common property ie fencing, driveways and landscape, letterboxes etc

    Until the dev is complete the property may be on a single title and whether the property is eligible for the exemption for land intended to be your PPOR etc. Land freshly developed is only eligible for exemption where actual residence commences and the intended to be used" rule requires that this occur or the tax may be re-assessed.

    You most likely need town planner advice

    As a guide land tax applies to more than "legal title" eg NSW

    Residential land
    Residential land includes any of the following.

    Description Conditions

    • Parcel of land On which there are one or more dwellings, or on which there is a building under construction that, when completed, will constitute one or more dwellings.
    • Strata lot If it is lawfully occupied as a separate dwelling, or suitable for lawful occupation as a separate dwelling.
    • Utility lot If its use is restricted to the owner or occupier of a strata lot.
    • Land-use entitlement If it gives the holder of the land-use entitlement to occupy a building, or part of a building, as a separate dwelling – eg company title and residential flats.
    • Parcel of vacant land Zoned or otherwise designated for use for residential or principally for residential purposes.
     
    Archaon likes this.
  3. housechopper2

    housechopper2 Well-Known Member

    Joined:
    5th Oct, 2016
    Posts:
    441
    Location:
    Melbourne
    No.

    They will have separate addresses, with separate rates notices and viewed separately by the SRO, regardless of whether they are formally subdivided with the land titles office.