Many investors are getting a rude shock when they receive their most recent Land Valuations – and the associated Land Tax bills. One reason for the significant increase in land valuations is, quite simply, the property price increases over the past few years. Land is worth more now than it was three years ago. Land values are calculated by the Valuer General based on a number of factors, including sales results at July of the valuing year and the two previous years. You can use your land valuation number to access a free detailed report on how the land value was calculated, including sales that were used as benchmarks, lane size, contract price, purchase price and adjusted land price. Landowners who disagree with the land value should submit an objection to the Valuer General within 60 days of the date of issue of a land tax assessment. More information on how land is valued and information on how to object to a land valuation is available at: https://www.valuergeneral.nsw.gov.au/land_values.
Land values are passed on to the Office of State Revenue, which calculates Land Tax based on the combined value of all the taxable land you own over the 2016 land tax threshold of $482,000. The amount of tax is $100 plus 1.6% of the land value between this threshold and the premium rate threshold of $2.947M, at which point it goes up to 2%. Land Tax is payable by companies and superannuation trustees as well as individual property investors. However, Land Tax is only payable on properties that are not your principal place of residence, so owner occupiers can enjoy the positives of an increase in the value of your asset, without increased tax!
If you disagree with an assessment, you may object to the Chief Commissioner within 60 days of the issue date (printed on the top right-hand side of your land tax notice of assessment) and the OSR will conduct an independent review of your objection.
Author: Virginia Van Ewyk