Steps to Dispute Land Tax Return
In an era where the cost of living is skyrocketing and interest rates are climbing, the need to dispute land tax return figures becomes even more pressing for property owners.
Have you ever wondered if you’re paying an unjust amount?
If the thought of disputing your land tax return has crossed your mind, here’s what you need to know.
What is Land Tax?
Land tax is an annual levy imposed on the unimproved value of the land that you own. The key term here is unimproved value, which refers to the value of the land without accounting for any improvements such as buildings, landscaping, paths, and fences.
Generally, you won’t have to pay land tax on your principal place of residence. So, investment property owners, business owners, and property developers are typically responsible for paying land tax.
The amount of land tax payable is primarily determined by the unimproved value of your land and the land tax threshold set by your state or territory.
Land Tax Thresholds
Land tax thresholds can vary from year to year and from one state or territory to another. For example, the NSW Revenue Office has set the following land tax threshold for the 2023/24 income year:
| General Threshold | Premium Threshold |
| $100 plus 1.6% of land value above the threshold of $969,000, up to the premium threshold. | $79,396 plus 2% of land value above the threshold of $5,925,000. |
You can access the different state and territory land tax rates on the respective Revenue Office websites.
Note: The Northern Territory is the only state or territory that doesn’t require property investors to pay land tax.
How is Your Land Tax Assessed?
The Valuer-General of each state or territory oversees the land valuation process at the beginning of each financial year. They typically conduct this valuation on a mass basis, meaning similar properties in different districts are grouped together.
Each group will have a benchmark property that the Valuer-General uses to compare the other properties within the group.
When comparing the benchmark property to the rest of the properties in the group, the following factors are taken into account:
- The size of the property
- The property’s features
- The surrounding location and infrastructure
- Zoning
- Heritage restrictions
- Any nearby developments
Each state and territory has its own specific land valuation process, but generally, they follow the same mass valuation procedure.
Once the land tax valuation process is complete, property investors and developers will receive land tax notices indicating their liability.
Given that it’s a mass valuation procedure, it’s not uncommon to find that your tax liability doesn’t accurately reflect the property’s value; there is a margin for error.
And the last thing you want is to pay an excessive land tax, so each state or territory’s Revenue Office allows concerned taxpayers to lodge a land tax objection.
Steps to Determine if Your Land Tax Liability is Fair
If you believe that you’re paying too much land tax, you can lodge an objection with your State or Terriorty’s administrative tribunal. Here are the steps you’ll need to follow:
Step 1: Gathering Supporting Evidence
Before lodging an objection, you need to gather data regarding the local property market at the time the valuation was conducted. Useful information may include:
- Your property’s physical attributes
- Land use of your property and surrounding properties
- Any constraints on your property
Remember, you can’t just consider the cost of properties for sale in your area. Relevant sales data will be key, and several websites can provide access to property data and analytics across Australia.
Step 2: Lodging Your Objection
Most states and territories require you to lodge an objection within 60 days of receiving your land tax assessment notice from the State Revenue Office. Each Revenue Office website provides a form that you’ll need to complete to provide reasons for your valuation objection.
Step 3: Waiting for the Objection Decision
Once you’ve lodged your objection, the Valuer-General appoints an independent valuer to assess the original valuation and your objections. The Valuer-General will then review the independent valuer’s assessment or decision and provide a final verdict.
This process typically takes around 90 days.
If the objection decision changes your land tax liability, you will either have to pay the outstanding amount based on the new assessment or receive a refund of the difference between your original assessment liability and the new tax liability amount.
Step 4: Appealing the Decision
If you’re not satisfied with the decision on your objection made by the Valuer-General, you have the right to lodge an appeal. However, this process can be slightly complex, and it’s advisable to seek legal advice before proceeding.
Key Takeaways
Understanding your land tax and knowing how to object to land valuations are crucial aspects of your investment journey. Here are the four steps to the objection process:
- Gathering relevant sales data
- Lodging the objection within 60 days of receiving your land value assessment
- Awaiting the Valuer-General’s verdict within 90 days
- Appealing the outcome if you’re not satisfied
Remember, if you decide to lodge an objection, you’ll need to provide reasons for the objection to the land tax assessment.
Engaging the help of a registered property valuer can greatly assist with this process.
If you have objections regarding your tax assessment too, you can contact Property Tax Specialists to find out more.
FAQ about Disputing Your Land Tax Assessment Notice
Why Is Land Tax Imposed?
It’s primarily imposed to generate revenue for state governments and is usually calculated based on the value of the land you own.
How Often Are Land Tax Assessments Conducted?
Typically, land tax assessments are conducted annually, but the frequency can vary depending on the jurisdiction.
Are There Any Exemptions or Concessions Available for Land Tax?
Yes, many jurisdictions offer exemptions or concessions for primary residences, agricultural land, or land owned by certain non-profit organisations. It’s essential to check with your local tax authority for specifics.
What If I Own Multiple Properties?
If you own multiple properties, each property’s value might be aggregated, and the tax could be calculated on the total value. However, rules can vary, so it’s crucial to understand your local regulations.
Is There a Cost Associated with Disputing My Land Tax Return?
While the initial filing of a dispute might not have a fee, there could be costs associated with obtaining professional valuations, legal advice, or if the case goes to a tribunal or court.
Can I Dispute My Land Tax Return If I Missed the Deadline?
Generally, tax authorities have strict deadlines for disputes. However, in exceptional circumstances, they might consider late applications. It’s essential to act promptly and seek advice if you believe you have grounds for a dispute.
What Happens If My Dispute Is Successful?
If your dispute is successful, you might receive a revised tax assessment, a refund, or a credit towards future tax liabilities.
Are There Professionals Who Can Assist with Land Tax Disputes?
Yes, there are tax consultants, lawyers, and valuation experts who specialize in land tax disputes and can provide guidance and representation throughout the process.
Disclaimer
Please note that every effort has been made to ensure that the information provided in this guide is accurate. You should note, however, that the information is intended as a guide only, providing an overview of general information available to property buyers and investors. This guide is not intended to be an exhaustive source of information and should not be seen to constitute legal, tax or investment advice. You should, where necessary, seek your own advice for any legal, tax or investment issues raised in your affairs.
