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SMSF Land Tax

Do SMSF’s need to pay Land Tax ?

 

Do SMSFs Need to Pay Land Tax? An Updated Overview

Introduction

When purchasing freehold property within a self-managed super fund (SMSF), the fund may be liable to pay land tax on the land owned directly by the fund. However, complying SMSFs are entitled to a land tax threshold in some states of Australia. This article provides an updated overview of land tax for SMSFs across various states.

Please note: This information is of a general nature only, and you should seek specific advice on your situation regarding land-only, house and land, and existing property purchases from a tax agent or lawyer.

Who Pays Land Tax

Land tax is payable on all houses, units, and land not earning any income, with calculations based on specific dates in each state. The only exclusions or total exemptions from paying land tax are a principal place of residence and primary production land in most states.

New South Wales: The land tax-free threshold is $684,000 for the 2022 calendar year.

https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/land-tax

Land tax payable in New South Wales is determined on the taxable value of land holdings as at 31 December each year. The threshold below which no tax is payable is $684,000 for SMSFs. Above this amount, land tax is $100 + 1.6% on the land value of the property. The premium land tax threshold for the 2022 land tax year is $4,616,000 and is taxed at 2% above the land value.

Victoria: The land tax-free threshold is $250,000 for the 2022 calendar year.

https://www.sro.vic.gov.au/landtax

SMSFs receive up to a $250,000 land tax-free threshold for residential properties. Commercial farm and primary production land could qualify for further land tax concessions or total exemptions from land tax levies.

Payments If the land tax assessment is greater than $200, you can choose to pay in full within 19 weeks or in four instalments over a 37-week period. If you have chosen the instalment option, you must pay each instalment by the due date to remain on the instalment program.

Queensland: The land tax-free threshold is $600,000 for the 2021-22 financial year.

https://www.qld.gov.au/environment/land/tax/rates

Land tax in Queensland is levied on the aggregate of the unimproved value of all freehold land owned in Queensland as at midnight on 30 June each year and taxed at 1.7% above the $600,000 – $10,000,000. The exemption for land tax applies to individuals who own a home or agricultural or primary production business. Various rates of tax apply to amounts above the threshold.

Payment Land tax can be paid by a single payment which is payable by 90 days from the date of the assessment or using the extended payment option by 3 equal payments due 45, 90, and 150 days after the date of assessment. The specific due dates for each payment are stated in your assessment notice.

Western Australia: The land tax-free threshold is $300,000 for the 2021-22 financial year.

https://www.wa.gov.au/service/financial-management/taxation/land-tax

Land tax in Western Australia is assessed on the basis of the unimproved value of land holdings as at 30 June each year. The tax threshold for the 2021-22 land tax year is $300,000. Land tax is applied at varying rates commencing at 0.25% – 2.67% for land value over $11 million in value

Seek Advice: This is general information only. obtain a legal opinion or a land tax calculation from a practicing accountant or lawyer

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