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This is a Bill, not an Act. For current law, see the Acts databases.
PARLIAMENT OF VICTORIA
Land Tax (Amendment) Act 1998
Act No.
TABLE OF PROVISIONS
Clause Page
1. Purpose 1
2. Commencement 1
3. Principal Act 2
4. Definitions 2
5. New Part IIA inserted 2
'PART IIA--PRINCIPAL PLACE OF RESIDENCE
EXEMPTION 2
13AA. Definitions 2
13A. Principal place of residence exemption 4
13B. Deferral of tax on certain residential land for 6 months 5
13C. Temporary absence from principal place of residence 6
13D. Exemption continues on death of resident 7
13E. Exemption continues if land becomes unfit for
occupation 8
13F. Purchase of new of principal residence 8
13G. Sale of old principal residence 9
13H. Unoccupied land subsequently used as principal
residence 10
13I. Partial exemption if land used for business activities 12
13J. Partial exemption or refund for trustees 13
13K. Prohibition on passing on land tax 14
13L. Application of Part 14
6. Notices of disposition no longer required 14
7. New section 45 substituted and 45A inserted 14
"45. Assessment and liability of joint owners 14
45A. Joint assessments in the case of principal place of
residence land 16
8. Consequential amendments 18
9. Regulations 19
10. Repeal of spent legislation 19
NOTE 20
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532049B.I1-22/4/98
PARLIAMENT OF VICTORIA
A BILL
to amend the Land Tax Act 1958 to introduce a principal place of
residence exemption, to repeal the Land Tax (Revision) Act 1991
and for other purposes.
Land Tax (Amendment) Act 1998
The Parliament of Victoria enacts as follows:
1. Purpose
The main purpose of this Act is to amend the
Land Tax Act 1958 to introduce an exemption
from land tax for land used as a person's principal
5 place of residence.
2. Commencement
This Act comes into operation on the day on
which it receives the Royal Assent.
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s. 3
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3. Principal Act
No. 6289. In this Act the Land Tax Act 1958 is called the
Reprinted as
Principal Act.
at 1 February
1997 and
further
amended by
Nos 31/1997,
40/1997,
86/1997 and
101/1997.
4. Definitions
5 (1) In section 3(1) of the Principal Act insert the
following definitions--
' "joint owners" means persons--
(a) who own land jointly or in common,
whether as partners or otherwise; or
10 (b) who are deemed by this Act to be joint
owners;
"principal place of residence" includes sole
place of residence;'.
(2) In section 3(1) of the Principal Act--
15 (a) in the definition of "owner", after "means"
insert ", except in Part IIA,";
(b) in the definition of "trustee", before
"includes" insert ", except in Part IIA,".
5. New Part IIA inserted
20 After Part II of the Principal Act insert--
'PART IIA--PRINCIPAL PLACE OF
RESIDENCE EXEMPTION
13AA. Definitions
(1) In this Part--
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Land Tax (Amendment) Act 1998
Act No.
"discretionary trust" means a trust under
which the vesting of the whole or any
part of the trust property--
(a) is required to be determined by a
5 person either in respect of the
identity of the beneficiaries or the
quantum of interest to be taken, or
both; or
(b) will occur in the event that a
10 discretion conferred under the
trust is not exercised;
"owner", in relation to land, means a
person--
(a) entitled to the land for an estate of
15 freehold in possession; or
(b) if the land is under a lease from
the Crown, entitled to a leasehold
interest as referred to in section
43--
20 and includes the owner of a life estate
in the land as referred to in section 41;
"trustee" means trustee within the meaning
of section 3(1) but does not include--
(a) a trustee of a discretionary trust;
25 or
(b) a trustee of a trust to which a unit
trust scheme relates; or
(c) a liquidator;
"unit trust scheme" means an arrangement
30 made for the purpose, or having the
effect, of providing facilities for
participation by a person, as a
beneficiary under a trust, in any profit
or income arising from the acquisition,
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s. 5
Act No.
holding, management or disposal of
property under the trust.
(2) For the purposes of this Part, a person is not
a trustee of a trust relating to land by reason
5 only that the land is subject to an implied or
a constructive trust.
13A. Principal place of residence exemption
(1) Subject to this Part, the following land is
exempt from taxation--
10 (a) land owned by a natural person that is
used and occupied as the principal
place of residence of that person;
(b) land owned by a trustee of a trust that is
used and occupied as the principal
15 place of residence of a natural person
who is a beneficiary of the trust.
(2) Subject to section 13B, the exemption in
sub-section (1) applies only to land used and
occupied as the principal place of residence
20 of the owner or beneficiary--
(a) since 1 July in the year preceding the
year for which the exemption is
claimed; or
(b) if the owner or trustee became the
25 owner or trustee of the land on or after
1 July in the year preceding the year for
which the exemption is claimed, since a
later date during that year.
(3) The exemption in sub-section (1) applies, in
30 addition to land of an owner that is used and
occupied as a person's principal place of
residence ("the PPR land"), to land owned
by that owner--
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s. 5
Act No.
(a) that is contiguous with the PPR land or
that is separated from the PPR land
only by a road or railway or other
similar area across or around which
5 movement is reasonably possible; and
(b) that enhances the PPR land; and
(c) that is used solely for the private
benefit and enjoyment of the person
who uses and occupies the PPR land
10 and has been so used--
(i) since 1 July in the year preceding
the year for which the exemption
is claimed; or
(ii) if the land was purchased by the
15 owner or trustee on or after 1 July
in the year preceding the year for
which the exemption is claimed,
so used and occupied since a later
date during that year.
20 (4) This section applies to land whether owned
by a sole owner or joint owners.
(5) In determining whether land is used or
occupied as the principal place of residence
of a person, account must be taken of every
25 place of residence of the person, whether in
Victoria or elsewhere.
13B. Deferral of tax on certain residential land
for 6 months
(1) If--
30 (a) land would be exempt from taxation in
respect of a year under section 13A but
for section 13A(2); and
(b) the owner satisfies the Commissioner
that the land is intended to be
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s. 5
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continuously used and occupied as the
principal place of residence of the
owner or, in the case of a trustee, as the
principal place of residence of a
5 beneficiary, for a period of at least
6 months from the date that the land
was first so used and occupied--
the Commissioner may determine that land
tax in respect of the land for that year is not
10 payable until the expiry of that 6 month
period.
(2) If land that would be exempt from taxation
in respect of a year but for section 13A(2)
has been continuously used and occupied as
15 the person's principal place of residence for
the period of 6 months, the land becomes
exempt from taxation in respect of that year
at the end of that period.
13C. Temporary absence from principal place of
20 residence
(1) For the purposes of this Part, land is taken to
be used and occupied as the principal place
of residence of a person despite the person's
absence from the land if the Commissioner is
25 satisfied--
(a) that the absence is temporary in nature;
and
(b) that the person intends to resume use or
occupation of the land as his or her
30 principal place of residence after the
absence; and
(c) that, in respect of the period of absence,
no other land is exempt from taxation
under this Part as the principal place of
35 residence of the owner or, in the case of
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s. 5
Act No.
a trustee, as the principal place of
residence of a beneficiary; and
(d) that the owner has not made any claim
for exemption for land tax under a law
5 of another jurisdiction (whether in or
outside Australia) in respect of the
period of absence for his or her
principal place of residence or, in the
case of a trustee, as the principal place
10 of residence of a beneficiary.
(2) For the purposes of section 13I, land to
which sub-section (1) applies is not to be
taken to be land used by a person to carry on
a substantial business activity only because
15 the owner lets the land for residential
purposes during the absence.
(3) Sub-section (1) does not apply in the case of
a temporary absence that continues for more
than 2 years or such longer period as the
20 Commissioner determines in a particular
case.
13D. Exemption continues on death of resident
(1) If land is used and occupied as the principal
place of residence of a person and the person
25 dies, liability for tax is to be assessed as if
the person had not died but had continued to
use and occupy the land as his or her
principal place of residence.
(2) Sub-section (1) operates only until the earlier
30 of--
(a) the first anniversary of the person's
death; or
(b) the day on which the person's interest in
the land vests in another person under a
35 trust; or
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(c) the day on which the person's interest in
the land vests in a person (other than
the person's personal representative)
under the administration of the person's
5 estate.
13E. Exemption continues if land becomes unfit
for occupation
(1) If land that is exempt from taxation under
section 13A(1) becomes unfit for occupation
10 as the principal place of residence of a
person because of damage or destruction
caused by an event such as fire, earthquake,
storm, accident or malicious damage,
liability for tax is to be assessed while the
15 owner continues to own the land as if it had
continued to be used and occupied as the
person's principal place of residence.
(2) Sub-section (1) operates until the second
anniversary of the day on which the land
20 became unfit for occupation as the person's
principal place of residence.
(3) Sub-section (1) does not apply if, at any time
during which it would otherwise apply, any
other land is exempt from taxation under
25 section 13A(1) as the principal place of
residence of the owner or, in the case of a
trustee, as the principal place of residence of
a beneficiary.
13F. Purchase of new of principal residence
30 (1) If a person--
(a) becomes the owner of land in a year for
use and occupation as his or her
principal place of residence; and
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s. 5
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(b) as at 31 December in that year uses and
occupies other land as his or her
principal place of residence--
the land referred to in paragraph (a) is
exempt from taxation for the following year.1
5
(2) If a trustee--
(a) becomes the owner of land in a year for
use and occupation as the principal
place of residence of a beneficiary
10 under the trust; and
(b) as at 31 December in that year the
beneficiary uses and occupies other
land as his or her principal place of
residence--
15 the land referred to in paragraph (a) is
exempt from taxation for the following year.2
(3) An exemption under sub-section (1) or (2) is
revoked if the owner or beneficiary does not
continuously use and occupy the land as his
20 or her principal place of residence for at least
6 months within 12 months after the
purchase.
(4) The Commissioner may assess the tax
payable by the owner or trustee in the
25 circumstances referred to in sub-section (3).
13G. Sale of old principal residence
(1) If an owner--
(a) as at 31 December in a year uses and
occupies land as his or her principal
30 place of residence; and
(b) as at that date is the owner of other land
that, for a period of at least 6 months
during that year, was continuously used
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s. 5
Act No.
and occupied as the principal place of
residence of the owner--
the land referred to in paragraph (b) is
exempt from taxation in respect of the
following year.3
5
(2) If--
(a) as at 31 December in a year, land is
used and occupied as the principal
place of residence of a beneficiary
10 under a trust; and
(b) as at that date the trustee is the owner
of other land that, for a period of at
least 6 months during that year, was
continuously used and occupied as the
15 principal place of residence of the
beneficiary--
the land referred to in paragraph (b) is
exempt from taxation in respect of the
following year.4
20 (3) An exemption under sub-section (1) or (2) is
revoked if the owner or trustee is still the
sole or joint owner of the land referred to in
sub-section (1)(b) or (2)(b) at the end of the
year following the year in respect of which
25 the land is exempt.
(4) The Commissioner may assess the tax
payable by the owner or trustee in the
circumstances referred to in sub-section (3).
13H. Unoccupied land subsequently used as
30 principal residence
(1) An owner who has paid tax in respect of a
year in respect of land that is not occupied is
entitled to a refund of that tax if--
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s. 5
Act No.
(a) for at least 6 months commencing in
that year, the land is continuously used
and occupied as the principal place of
residence of the owner; and
5 (b) an application for a refund is made
before the end of the next following
year.
(2) A trustee who has paid tax in respect of a
year in respect of land that is not occupied is
10 entitled to a refund of that tax if--
(a) for at least 6 months commencing in
that year, the land is continuously used
and occupied as the principal place of
residence of a beneficiary under the
15 trust; and
(b) an application for a refund is made
before the end of the next following
year.
(3) If--
20 (a) an owner or trustee is entitled under
sub-section (1) or (2) to a refund of tax
in respect of a year in respect of land;
and
(b) the owner or trustee is not entitled to an
25 exemption under this Part in respect of
any other land in respect of that year or
the following year--
the land referred to in paragraph (a), while
owned by the owner or trustee, is exempt
30 from taxation in respect of that next
following year.
(4) Sub-sections (1), (2) and (3) do not apply if
the owner or trustee derived any income
from the land at any time during which it
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s. 5
Act No.
was not occupied as a principal place of
residence.
13I. Partial exemption if land used for business
activities
5 (1) Despite anything to the contrary in this Part,
if land that would be exempt from taxation
under another provision of this Part, but for
this section, is used by any person to carry
on a substantial business activity, the
10 exemption applies only to the extent that the
land is used and occupied for residential
purposes.
(2) In determining whether land is used by a
person to carry on a substantial business
15 activity, account must be taken of--
(a) whether paid employees or contractors
(other than employees or contractors
who are relatives of, and who ordinarily
reside with, the person who uses and
20 occupies the land as his or her principal
place of residence) work on the land;
and
(b) whether any part of the land is used or
allocated solely for business purposes;
25 and
(c) if part of the land is used or allocated
(whether solely or partly) for business
purposes, the proportion of the area of
the land, or of the floor space of
30 buildings on the land, that is so used or
allocated; and
(d) the amount of income (if any), and the
proportion of the person's total income,
that is derived from business activities
35 carried on on the land; and
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Land Tax (Amendment) Act 1998
s. 5
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(e) such other matters (if any) as are
prescribed for the purposes of this
section.
(3) If sub-section (1) applies, the Commissioner
5 must apportion the value of the land as
between use and occupation for residential
purposes and use for business purposes,
having regard to the proportion of the land
used for each purpose and the extent to
10 which each proportion is so used.
(4) The Commissioner may consult the Valuer-
General in relation to an apportionment
under this section.
13J. Partial exemption or refund for trustees
15 (1) Despite anything to the contrary in this Part,
if--
(a) an exemption from taxation or a refund
of tax is provided for in this Part as a
consequence of the continuous use and
20 occupation of land as the principal
place of residence of one or more
beneficiaries under a trust; and
(b) other beneficiaries under the trust who
do not use and occupy the land as their
25 principal place of residence have a
beneficial interest in the land--
the amount of the exemption or refund is
determined as if the value of the land for the
purposes of the exemption or refund were
30 such proportion of the value of the land as is
equal to the proportion that the interest in the
land held by the beneficiary bears to the total
interests of all beneficiaries in the land.
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s. 6
Act No.
(2) Nothing in sub-section (1) applies in the case
of a beneficiary entitled to a life estate in
possession.
13K. Prohibition on passing on land tax
5 (1) A provision in a residential tenancy
agreement entered into on or after 1 January
1998 to the effect that the tenant is liable to
pay, or to reimburse the landlord in respect
of, any land tax payable by the landlord in
10 respect of the rented premises is void.
(2) This section applies despite anything to the
contrary in section 71(3).
(3) In this section--
"residential tenancy agreement" means an
15 agreement, whether or not in writing
and whether express or implied, under
which a person lets premises as a
residence.
13L. Application of Part
20 The exemptions and refunds contained in
this Part apply with respect to land tax for
1998 and each subsequent year.'.
6. Notices of disposition no longer required
In section 15 of the Principal Act sub-section (3)
25 is repealed.
7. New section 45 substituted and 45A inserted
For section 45 of the Principal Act substitute--
"45. Assessment and liability of joint owners
(1) Joint owners of land are to be assessed and
30 liable for tax in accordance with this section.
(2) Joint owners of land are to be jointly
assessed and liable for tax in respect of the
14
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Land Tax (Amendment) Act 1998
Act No.
land as if it were owned by a single person,
without regard to--
(a) the separate interest of each joint
owner; or
5 (b) any other land owned by any joint
owner (either alone or jointly with
someone else).
(3) Each joint owner of land is also to be
separately assessed and liable in respect of--
10 (a) the owner's individual interest in the
land (as if the owner were the owner of
a part of the land in proportion to that
interest); and
(b) any other land owned by the owner
15 alone; and
(c) the owner's individual interest in any
other land.
(4) There is to be deducted from the tax payable
by a joint owner under sub-section (3) an
20 amount (if any) necessary to avoid double
taxation, being the lesser of--
(a) the amount determined by the formula:
A× B
where--
25 A is the proportion of the owner's
individual interest in the jointly-owned
land to the total interests in that land;
B is the total amount of tax assessed on
the jointly-owned land under sub-
30 section (2); and
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s. 7
Act No.
(b) the amount determined by the formula:
C
×E
D
where--
C is the value of the joint owner's
5 individual interest in the jointly-owned
land (as determined under sub-section
(3)(a));
D is the total value of all land of the
joint owner assessed under sub-section
10 (3);
E is the amount of tax assessed under
sub-section (3).
(5) For the purposes of this section a joint owner
may be separately assessed under sub-
15 section (3) in respect of land even though no
tax is jointly assessable in respect of that
land under sub-section (2).
(6) The liability of a joint owner for tax must be
taken always to have been as set out in this
20 section as substituted by section 7 of the
Land Tax (Amendment) Act 1998.
(7) Despite sub-section (6), section 45, as in
force immediately before the commencement
of section 7 of the Land Tax (Amendment)
25 Act 1998, continues to apply with respect to
the assessment of joint owners if proceedings
were issued before 21 April 1998 in which
the liability for tax of the joint owners was in
issue.
30 45A. Joint assessments in the case of principal
place of residence land
(1) For the purposes of section 45 and subject to
this section, if land that is jointly owned is
16
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Land Tax (Amendment) Act 1998
s. 7
Act No.
exempt from taxation under Part IIA as the
principal place of residence of some, but not
all, of the joint owners--
(a) no tax is jointly assessable in respect of
5 that land under section 45(2);
(b) each joint owner who does not use and
occupy the land as his or her principal
place of residence may be separately
assessed in respect of that land under
10 section 45(3).
(2) A joint owner of land is not, in respect of a
year, liable to be assessed under this section
for tax in respect of the land if the land--
(a) was the principal place of residence of
15 the joint owner at any time during the
previous year; and
(b) is exempt from taxation in respect of
that year under Part IIA on account of
the use and occupation of the land as
20 the principal place of residence of
another joint owner of the land, being a
person for whom the land was principal
place of residence during the time
referred to in paragraph (a).
25 (3) A joint owner of land who--
(a) under sub-section (2), is not liable to be
assessed in respect of a year in respect
of land that was his or her principal
place of residence is not, in respect of
30 the following year, liable to be assessed
under this section in respect of that
land; and
(b) is entitled to an exemption under this
Part in respect of other land in respect
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Land Tax (Amendment) Act 1998
s. 8
Act No.
of that year or the next following
year--
is not liable to be assessed in respect of the
land referred to in paragraph (a) in respect of
5 that next following year.
(4) Sub-section (3) does not apply to a joint
owner of land who uses and occupies other
land that is exempt from taxation under Part
IIA as his or her principal place of residence
10 unless the person has so used and occupied
the land for at least 6 months immediately
before the end of the next following year
referred to in that sub-section.
(5) If the Commissioner is satisfied that a joint
15 owner of land would not be liable to be
assessed in respect of land but for sub-
section (3), the Commissioner may
determine that land tax in respect of the land
payable by the joint owner is not payable
20 until the end of the next following year
referred to in that sub-section.
(6) Despite anything to the contrary in Part IIA,
if a joint owner of land referred to in sub-
section (2) or (3) who ceased to use and
25 occupy the land as his or her principal place
of residence resumes such use and
occupation during a year in respect of which,
under this section, the joint owner is not
liable to be assessed in respect of that land,
30 that joint owner may be assessed for land tax
in respect of any other land that in respect of
that period would have been, apart from this
sub-section, exempt from taxation under Part
IIA as the principal place of residence of that
35 joint owner.".
8. Consequential amendments
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Land Tax (Amendment) Act 1998
s. 9
Act No.
In the Principal Act, sections 50A and 91AB are
repealed.
9. Regulations
After section 93(1)(b) of the Principal Act
5 insert--
"(c) prescribing factors to be taken into account
for the purposes of section 13I;".
10. Repeal of spent legislation
No. 74/1991
The Land Tax (Revision) Act 1991 is repealed. as amended
by Nos
71/1992,
76/1992 and
30/1993.
10
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Land Tax (Amendment) Act 1998
Notes
Act No.
NOTE
1
In this situation, the owner will also be exempt from taxation in respect of
the land referred to in paragraph (b) in the circumstances set out in
section 13A(1)(a).
2
In this situation, the owner will also be exempt from taxation in respect of
the land referred to in paragraph (b) in the circumstances set out in
section 13A(1)(b).
3
In this situation, the owner will also be exempt from taxation in respect of
the land referred to in paragraph (a) in the circumstances set out in
section 13A(1)(a).
4
In this situation, the owner will also be exempt from taxation in respect of
the land referred to in paragraph (a) in the circumstances set out in
section 13A(1)(b).
By Authority. Government Printer for the State of Victoria.
20
532049B.I1-22/4/98
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