REVENUE RULING LT 75
Exemption - Land Used And Occupied Primarily for Low Cost Accommodation - 2005 Tax Year
(Section 10Q - Land Tax Management Act 1956)
Where land situated within certain boundaries is used and occupied primarily for low-cost accommodation (other than as a boarding house) an exemption from land tax is available if guidelines approved by the Treasurer are met. Where only part of the land or premises are used to provide the accommodation, an exemption is not available but the owner is entitled to claim a reduction in the land value of the land.
The purpose of this ruling is to outline the approved guidelines applying to the 2005 tax year, to explain the conditions that entitle the owner to claim an exemption or a reduction in the land value and to provide a statutory declaration to be completed by owners who claim the concession. An explanation of the guidelines approved by the Treasurer for the 2005 tax year for boarding-houses is contained in Land Tax Revenue Ruling LT.
GUIDELINES APPROVED BY THE TREASURER
The approved guidelines for the 2005 tax year are as follows:
Owners of land who provide low
cost accommodation (that accommodation not being licensed premises or a
boarding-house) will be entitled to claim exemption from land tax or a
reduction in the land value of the land if the land is situated within
a 5 kilometre radius of the Sydney GPO and on condition
(a) each tenancy was subject to a Residential Tenancy Agreement under the Residential Tenancies Act 1987; and
(b) the maximum weekly tariff paid in terms of a Residential Tenancy Agreement during the 6 months ended 31 December 2004 was no more than:
$165 for one bedroom accommodation; or
$221 for two bedroom accommodation; or
$276 for three or more bedroom accommodation; and
(c) a tenant used and occupied the
premises or part of the premises for residential purposes and no
other purpose for the 6 months immediately preceding 31 December
(d) the owner gives an undertaking to pass on a benefit to the tenant(s) broadly equivalent to the land tax exemption. The benefit could, for example, be one or more of the following:
reducing the tariff; or
foregoing any increase in tariff that would otherwise have occurred under the terms of the Agreement; or
carrying out improvements or renovations to the premises which are not required to be made under the terms of the Agreement e.g. by complying with a Council regulation, fire safety regulation etc.
An exemption or a reduction in the land value is not applicable where the use and occupation of the land was by any member of the family of the owner or where the land is owned by a company, by a member of the family of a director or a shareholder of that company;
The concession applies if the Chief Commissioner of State Revenue is satisfied that the circumstances preventing the term of the tenancy being for less than 6 months prior to the taxing date were beyond the owner's control; and
For the purposes of paragraph 3(ii) above, a member of the family of the owner or the member of the family of a shareholder means a person who could in any circumstances possibly be entitled in terms of the Wills, Probate and Administration Act 1898 to an inheritance should the owner or shareholder die intestate.
If only part of the land or premises were used for low cost accommodation, a pro rata reduction in the land value of the land will be calculated by the Chief Commissioner if the Chief Commissioner is not satisfied that the reduction claimed is fair and reasonable. Otherwise, the calculation will be made on a floor area basis.
Owners must apply for exemption by completing the standard statutory declaration which should be lodged as soon as possible but within 30 days of the serving of a notice of assessment if the assessment contains the land. The declaration may be posted to the Chief Commissioner at the following address:
Client Services Division
Sydney NSW 2001
or alternatively may be lodged at any branch of the Office of State Revenue from where additional copies of the declaration are available.
Records of owners who claim concessions are regularly audited by the Office of State Revenue. Documentary evidence supporting the information in the statutory declaration must be retained and produced for inspection, if requested.
Chief Commissioner of State Revenue
9 December 2004