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LAND TAX AMENDMENT BILL 2010
NOTES ON CLAUSES
Clause 1 Short title.
Clause 2 Provides for the Act to commence on 1 July 2010.
Clause 3 Defines the Land Tax Act 2000 as the "Principal Act" referred to in
Part 2 of this Act.
Clause 4 Paragraph (a) amends section 3 of the Land Tax Act 2000 to allow
for definitions to be made in specific parts of the Act, that do not
affect the whole Act.
Paragraph (b) amends section 3 of the Land Tax Act 2000 by
inserting a definition of "prescribed dwelling", for the purpose of
determining shack land and qualifying home business eligibility. The
definition requires the dwelling to be a permanents building affixed
to land, as opposed to a structure of a temporary or moveable
nature such as a caravan.
Paragraph (c) amends section 3 of the Land Tax Act 2000 by
inserting a definition of "qualifying home business".
In the qualifying home business definition, paragraph (a) requires
that qualifying home businesses must be operated from land on
which a prescribed dwelling is located. Paragraph (b) requires that a
qualifying home business must be operated from either a prescribed
dwelling or a building ordinary found on residential land, such as a
garage or shed. A building ordinary found on residential land does
not include purpose built commercial buildings, such as shop-fronts
and commercial accommodation buildings not inhabited by the
owner. Paragraph (c) requires that a qualifying home business is
operated by the land owner or immediate family member. Paragraph
(d) requires that the land must be the sole permanent business
dwelling, which disqualifies business that have other shops, offices
or workshops etc, but includes mobile businesses, operated by
people such as tradespersons or consultants, who conduct much of
their work on various client sites. Paragraph (e) disqualifies home
businesses that ordinarily use more that 50 per cent of the dwelling
floor space.
Paragraph (d) of this Act amends section 3 of the Land Tax Act
2000 by inserting a definition of "shack land" by reference to section
6A.
2
Clause 5 Inserts a new section 6A into the of the Land Tax Act 2000, which
prescribes the criteria for "shack land" classification.
By section 6A(1), shack land is land that the Commissioner of State
Revenue has determined to be shack land in accordance with the
requirements of section 6A.
Section 6A(2) requires the Commissioner to determine land to be
shack land if the land meets the criteria for "qualifying land" and that
the land owner meets the criteria of a "qualifying owner".
Section 6A(3) provides that land is qualifying land if the
Commissioner is satisfied that a prescribed dwelling is located on
the land; building work since 1 July 2004, including new building and
alternations on existing buildings, are compliant with the Building
Act 2000; the land is held for recreational purposes of the owner
and their family, thereby excluding land held for commercial
purposes; it is not the principal residence of any person; no income
is derived from the land, including the dwelling; it is not advertised
for lease or rent; and the assessed land value is no more than
$500 000.
A provision is also made to allow regulations that prescribe
additional conditions for land to be qualifying land.
Section 6A(4) provides that an owner of land, is a qualifying owner if
the Commissioner is satisfied that the owner is a natural person;
resides in Tasmania; is at least 18 years of age; and does not own
any other shack land and their spouse does not own shack land.
The intent of these provisions is that married couples and other
couples in a significant relationship, as defined by the Relationships
Act 2003, are entitled to have not more than one parcel of land
classified as shack land between them.
Section 6A(5) requires owners of shack land to notify the
Commissioner if any income has been received in relation to the
shack land, including the dwelling on that land, with 30 days of
receipt.
Section 6A(6) requires the Commissioner to determine parcels of
shack land, in respect of which income has been generated in a
financial year, as general land retrospectively from 1 July of that
financial year; and to reassess the land tax liability of the land
owner, unless the owner successfully applies for the land to receive
an alternative classification, such as principal residence land,
primary production land or exempt land.
3
Clause 6 Amends section 16 of the Land Tax Act 2000 to require owners of
shack land to notify the Commissioner with 30 days if the land
ceases to be shack land, for instance if the it becomes any person's
principal residence, is used for commercial purposes, or ceases to
meet any other conditions under section 6A.
Clause 7 Amends section 20 of the Land Tax Act 2000 to allow a rate of land
tax to be set in respect of shack land.
Clause 8 Amends section 26 of the Land Tax Act 2000 so that, for a portion of
principal residence land used to operate a qualifying home
business, the land value in respect of that portion is not to be
apportioned as general land, despite being used for a purpose other
than the principal residence of the owner or related person.
Clause 9 Amends section 36 of the Land Tax Act 2000 so that the onus is on
the land owner to establish to the Commissioner's satisfaction that a
business is a qualifying home business and that land is shack land.
Clause 10 Amends section 37 of the Land Tax Act 2000 so that a first home
owner builder who received or is eligible for a land tax rebate under
section 37(1) and was entitled to a refund of duty under section 30A
of the Duties Act 2000, will be entitled to an addition rebate if they
were the owner and incurred a land tax liability in the year prior to
the year in respect of which a rebate under section 39(1) was paid
or payable.
This rebate is only be available in respect of land on which the
construction of the dwelling is completed after 1 July 2010.
Clause 11 Defines the Land Tax Rating Act 2000 as the "Principal Act" referred
to in Part 3 of this Act.
Clause 12 Amends the Land Tax Rating Act 2000 to prescribe the rate of tax
on shack land to be zero.
Clause 13 Substitutes Schedule 1 of the Land Tax Rating Act 2000 so that,
from 1 July 2010, land tax liabilities in respect of general land are
assessed at the rate of for zero for assessed land value less than
$25 000; $50 plus a marginal rate of 0.55 per cent of land value
between $20 000 and $349 999.99; and $1 837.50 plus a marginal
rate of 1.5 per cent for land value of $350 000 or more.
Clause 14 Repeals this Act ninety days after it commences.