Tax Tip 69: Land Tax on Trust owned property in VIC and PPOR exemption

I often say VIC has some of the best stamp duty laws in the country. They also have some good land tax provisions too.


Note if operating a business from the property see s 62
http://www.austlii.edu.au/au/legis/vic/consol_act/lta200590/s62.html

If a property is owned by the trustee of a discretionary or a unit trust a land tax exemption may be available if a beneficiary of the trust is residing in the property. This comes under s46H Land Tax Act 2005 (VIC) see http://www.austlii.edu.au/au/legis/vic/consol_act/lta200590/s46h.html

For the exemption to apply, the trustee must nominate a beneficiary, called the 'nominated PPR beneficiary'.

The beneficiary must

• be a natural person
• be a beneficiary or unit holder of the trust

The Trustee must make a nomination to the Commissioner on the appropriate form and the nomination only takes effect for the tax year it is lodged (no previous years).

If the above conditions are met then the land tax payable is effected by s46I http://www.austlii.edu.au/au/legis/vic/consol_act/lta200590/s46i.html
This section gives a concessional rate of land tax if the property is occupied as the PPOR of the nominated PPR beneficiary. that is the normal land tax rates of part 1 schedule 1 apply. http://www.austlii.edu.au/au/legis/vic/consol_act/lta200590/sch1.html


Note that there is also a trap for young players as 'beneficiary' of a discretionary trust has a special definition sound under s3: