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Land tax is an annual tax based on the ownership and usage of land at midnight on 30 June and is levied in respect of the financial year following that date. Various exemptions or concessions may apply. Until land tax is paid it remains a first charge on the land.
If, at midnight 30 June in any one year, you own land (excluding exempt land) with an aggregated taxable value in excess of the taxable threshold, you are required to pay land tax for the following financial year. If you sell land after midnight 30 June, you are still responsible for land tax for that 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. 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); a person deemed to be the owner because he/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.
Taxable land includes but is not limited to: vacant land; residences which are not used by the owners as their primary residence; ‘secondary’ residences such as holiday homes; holiday units or hobby farms; rental homes or units; 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; land used for business, commercial, professional or trade purposes under arrangements with the Crown, Crown instrumentalities, local authorities or public statutory bodies.
Purchasers of land, or their agents, may check whether any land tax assessed remains outstanding by lodging a liability enquiry with the Office of State Revenue at the Department of Finance. A Certificate of Land Tax Charges will be issued showing the amount of any outstanding liability in respect of the land. A memorial prohibiting the transfer of the land is generally lodged against the land title to ensure that any land tax arrears are paid prior to the land being transferred.
Exemptions and concessions are available, the most common a residential exemption - this applies to the owner’s primary residence at 30 June if the owner resides there and the land is used solely or principally for residential purposes. It is also possible to claim an exemption whilst building one's primary residence. Other exemptions and concessions may be available if the land is: used for a rural business; owned by a trust/company and used by a disabled beneficiary; owned by an individual and used by a disabled person related to the owner; owned by a religious body and used for religious purposes; owned by an educational institution and used for educational purposes; used for a public or religious hospital; owned by a public charitable or benevolent institution or a non-profit organisation and used for the purposes of that organisation; used as a retirement village; used as an aged care facility; used as a caravan park or camping ground; held under an approved conservation covenant or owned by a deceased estate. In addition, property developers may be eligible to claim a concession on the lower undeveloped valuation of the land, i.e. prior to the subdivision but must meet the eligibility criteria.
For details concerning current taxable thresholds, land tax rates and calculation of land tax, see www.finance.wa.gov.au/landtax.