Land Tax - Principal residence Queensland

[NedKelly]

Some friends settled on a property mid-May and moved in at the beginning of June. The place is their Principal Place of Residence. The Land valuation is $1,350,000. (It is an expensive waterfront property)

When they settled the vendor claimed $1000 in land tax from them but their accountant has advised them that as it is their Principal Place of Residence then they are exempt from land tax. I don't think their accountant is totally correct on the basis that they need to have lived in it for 6 months before they can claim the exemption so I think they should pay a years land tax for 2013-2014 because they lived there for only 1 month before the tax date of 30th June. After the first year I think they can then claim the exemption.

Not being an accountant, maybe someone here could confirm the situation.

 

[travelbug]

Sounds like their solicitor needs to go back to Uni.

If they had to pay land tax it would come from the Dept State Revenue, not the vendor. They dont have to pay land tax (well in NSW) I assume Qld has the exempt PPOR.

I'd say the vendor was originally paying land tax and is claiming the onme month portion of it.
I don't know about Qld but on a NSW contract there's a section on the front page where iot says-
Land tax adjustable Yes No. If the Yes box is ticked then they agreed to pay it. If not, tell the vendor to go away.

The solicitor should know this. Basic stuff.

 

[Terry_w]

Sounds like your friend needs legal advice not advice from an accountant.. This involves interpretation of the Land Tax Act 2010 QLD.

It was probably due to an adjustment as per the contract. Not sure why travelbug thinks the solicitor stuffed up unless they didn't explain this.

If they are liable as owners it could be for a few reasons such as:
- being only partially exempt (using home for income production)
- being over the threshold (don't know if there is one in QLD)
- claiming another property as main residence
etc

 

[NedKelly]

It's not the $1000 they paid that is the real issue, it appears it was specified in the contract they signed that the land tax was to be apportioned. It is the tax for 2013 - 2014 and they are up for over $10,000 if they are unable to claim the exemption. I looked at the Land Tax Act 2010 QLD and it says that you have to be living in the property as the main residence for 6 months before you can claim the exemption. Since the tax date is 30th June I interpret that to mean you have to have lived in it for 6 months prior to the 30th June before you can get an exemption. The accountant thinks otherwise. Does someone know for sure?

 

[Terry_w]

It's not the $1000 they paid that is the real issue, it appears it was specified in the contract they signed that the land tax was to be apportioned. It is the tax for 2013 - 2014 and they are up for over $10,000 if they are unable to claim the exemption. I looked at the Land Tax Act 2010 QLD and it says that you have to be living in the property as the main residence for 6 months before you can claim the exemption. Since the tax date is 30th June I interpret that to mean you have to have lived in it for 6 months prior to the 30th June before you can get an exemption. The accountant thinks otherwise. Does someone know for sure?

That doesnt soumd right. Have u got a section where it says that

 

[NedKelly]

That doesnt soumd right. Have u got a section where it says that

https://www.osr.qld.gov.au/legislation-rulings/public-rulings/land-tax/lta000-1.shtml

clause 7 Land used as a home.

 

[Terry_w]

https://www.osr.qld.gov.au/legislation-rulings/public-rulings/land-tax/lta000-1.shtml

clause 7 Land used as a home.

Ned,

Best to look at these documents in conjunction with the actual legislation

see s36(1)(c) and subsection 2
http://www.austlii.edu.au/au/legis/qld/consol_act/lta201090/s36.html

(1) Land is used as the home, of a person for a financial year, only if—
...
(c) otherwise—the commissioner is satisfied the land is used as the person's principal place of residence, whether alone or with another person, when a liability for land tax arises for the financial year.

 

[NedKelly]

Ned,

Best to look at these documents in conjunction with the actual legislation

see s36(1)(c) and subsection 2
http://www.austlii.edu.au/au/legis/qld/consol_act/lta201090/s36.html

Looks promising for them. Would they have to apply to the commissioner or do nothing until asked?

 

[Terry_w]

Looks promising for them. Would they have to apply to the commissioner or do nothing until asked?

If they have been asked to pay I would suggest just calling up the OSR and explaining the situation. Maybe a simple letter will suffice if it cannot be done over the phone.