Home owners in Metropolitan Melbourne who own adjoining land may be subject to land tax from 1 January 2020
If you own your home and adjoining land, you may currently be eligible for the principal place of residence (“PPR”) land tax exemption on both your PPR land and the adjoining land, regardless of where you live in Victoria. However, from 1 January 2020 the exemption for adjoining land will only apply in Regional Victoria.
You may be impacted by the change if you own adjoining land in one of the Metropolitan Councils listed below.
The PPR exemption applies to the land that your home is situated on.
The current exemption also extends to land which adjoins your PPR land under certain circumstances. This land will be on a separate title to the PPR land but would typically share a common boundary. To be eligible for the exemption, the adjoining land must:
•not include a separate residence; and
•enhance the PPR land; and
•be used solely for the private benefit and enjoyment of the owner.
The change will impact many home owners in Metropolitan Melbourne from January 2020, when land tax is applied to their adjoining land.
“Many of our clients live in Metropolitan Melbourne and own an adjoining block to their residence, which often includes a garden, tennis court, garage or pool. This land may now be subject to land tax from January 2020,” comments Blake Rodgers, ShineWing Australia.
“We are working with our clients on tailored solutions depending on their situation and goals, including reviewing their land tax assessments, advising on implications of consolidating titles, obtaining independent valuations, managing the objection process and advising on property ownership structures.”
Land tax is a self-assessed, state based tax and applies to non-exempt land in your personal name (either individually or jointly) with combined taxable values of $250,000 or more. As a guide, land tax assessments are based on the site values disclosed on council rates notices and are issued between late January to late May each year. Current land tax rates for individuals who live in Australia range from 0.11% to 2.25% and increase progressively as land values increase.
There are options available for affected home owners to consider. We work with our clients to assess their situation and action the most appropriate advice for them.
Affected home owners should consider consolidating the titles of their PPR land and adjoining land in order to maintain the land tax exemption. The Registrar of Titles must register the plan of consolidation by 31 December 2019 to ensure the consolidated title is eligible for the PPR exemption in 2020.
Those who receive an assessment may consider objecting if the land ownership details are incorrect or if the valuation is inaccurate, which needs to be done within 60 days of receiving the assessment.
You may be impacted by the change if you own adjoining land in one of these Metropolitan Councils:
Banyule City Council
Bayside City Council
Boroondara City Council
Brimbank City Council
City of Casey
Greater City of Dandenong
City of Darebin
Frankston City Council
City of Glen Eira
City of Hobsons Bay
Hume City Council
City of Kingston
Knox City Council
City of Manningham
Maribyrnong City Council
Maroondah City Council
City of Melbourne
City of Melton
City of Monash
City of Moonee Valley
Moreland City Council
Mornington Peninsula Shire
City of Port Phillip
City of Stonnington
City of Whitehorse
City of Whittlesea
City of Wyndham
City of Yarra
Yarra Ranges Council
If you own adjoining land in regional Victoria (in a Victorian Council not listed here) you may still be able to access the PPR land tax exemption after 1 January 2020.