The Tasmanian Government have recently made changes to land tax, with the hope of easing the cost of living pressures for families in Tasmania. With that being said, continue reading to find out more about the changes to land tax and what this means for you.
What is land tax?
Before we reveal more about the recent tax changes, it is imperative to explain what land tax is. Land tax is a yearly tax that landowners need to pay by the 1st of July each year. Properties that are deemed taxable include shacks, rental properties, commercial properties, and vacant land.
Land tax is not due on a property that is the principal place of residence for the owner, i.e. if you live in the property full-time, nor is it payable the land is deemed as primary production land. As the owner of the property, you need to apply for either of these land classifications.
What changes have been made to land tax?
Land tax thresholds are going to be raised so that they reflect the strong property market of today. This means that rather than needing to pay land tax if the land is valued at $25,000, you will need to pay it once the land is valued at $50,000. This means that the threshold has doubled. In addition to this, there has been an increase of $50,000 to the top threshold, which has gone from $350,000 to $400,000.
Aside from this, the premium penalty rate of interest has been halved; it is now four per cent, rather than being eight per cent. Moreover, if you have a land tax bill that amounts to more than $500, you have the ability to pay this in three instalments over the course of the year.
It is hoped that the new tax arrangements will save Tasmanians hundreds of dollars per annum. It is estimated that approximately 70,000 landowners will benefit by as much as $613 per annum. In addition to this, 4,100 extra landowners will not pay any land tax at all during the year ahead, which will be music to a lot of people’s ears.
This news comes as there have been a number of measures that have been put in place to help landlords and tenants. This includes $1 million of support to landlords, as well as $2.3 million of support for tenants. The Minister of Finance has said that the recent changes to land tax will complement these measures.
So there you have it: the changes that have been made with regard to land tax in Tasmania. If you have any queries regarding the taxes that are associated with owning a property here in Tasmania, please do not hesitate to get in touch with Charlotte Peterswald Property Management for more information. Alternatively, more information can be found by visiting https://www.sro.tas.gov.au/land-tax
