Do I need to pay Land Tax on my Property in the ACT?
Generally speaking, a property was only subject to Land Tax if it was used as an investment Property. From 1 July 2018, Land Tax has been payable on a property unless it is used as your ‘principal place of residence, even if the property is vacant’.
Land Tax is assessed on a quarterly basis. If the property was not your principal place of residence on the first day of the relevant quarter, land tax is payable for the entire quarter. If you cease using the property as your principal place of residence during a quarter, the ACT Revenue Office will grant an exemption for the quarter that immediately follows, but Land Tax will apply from any subsequent quarter for which the property is not your principal place of residence.
The registered Owner must notify the ACT Revenue Office within 30 days of your property no longer being used as your principal place of residence. Notification can be completed online:
https://www.revenue.act.gov.au/self-assessment-tools-and-forms/forms/land-tax-notification
When selling your property, consideration should be given to the anticipated settlement date. If you are no longer using your property as your principal place of residence and settlement is scheduled for the second full quarter after you have vacated (or settlement is delayed into the second quarter) you may be liable for any assessed land tax for the second quarter.
You should discuss your land tax obligations with your solicitor/conveyancer before marketing your property for sale. Your Solicitor/Conveyancer could ensure if you are liable for Land Tax, the buyer will reimburse you for part of these costs at the time of settlement. However, if the Buyer is a live in owner, they will be exempt from Land Tax and may request that the Contract reflects no adjustment for Land Tax, then you as the seller would be liable for the full quarter without a refund.
For further information please visit the ACT Revenue Office Website at https://www.revenue.act.gov.au/land-tax
If you need assistance with a question about Land Tax in any State or Territory in Australia, contact Ben Hatte, Director of the Property Law team on 02 6188 3600.