The ACT Government collects land tax to provide a range of essential services to the ACT community.
Beginning on 1 July 2018, ACT residential properties that are not your principal place of residence, or otherwise exempt, are liable for land tax. Your principal place of residence is your main home. Both vacant and rented properties are liable for land tax.
You’re also liable for land tax if you rent out a secondary dwelling to your principal place of residence, such as a granny flat.
If you’re not an Australian citizen or resident of Australia, you also need to pay the Foreign ownership surcharge.
Who pays land tax?
Land tax applies to residential rental properties. Land tax also applies to residential properties owned by a trust or corporation, even if those properties are not rented. Land tax does not apply to commercial properties.
Rented residential properties include dual occupancies, granny flats, multiple dwellings and boarding houses that are rented to tenants.
Rent can include cash, services or other forms of payment that establish the existence of a tenancy arrangement.
Buying a property and land tax
From 1 July 2018, when buying a residential property we’ll ask you whether the property will be your principal place of residence and when you plan to move in.
If you tell us the property will be your principal place of residence, you don’t have to pay land tax. You have 90 days after settlement to move into the property.
We may issue a land tax assessment for your property if you don’t tell us it’s your principal place of residence.
Owning a property and land tax
If you own a property that becomes liable for land tax – for example, because you’ve moved out of your home to turn it into a rental property – you have 30 days to notify the ACT Revenue Office.
If you don’t supply this information on time, it’s a tax default, and you may need to pay interest and penalties in addition to the land tax.
You’ll need your rates account number, the property address and the dates that your property started or stopped being liable for land tax.
From 1 July 2018 an online notification form will be available on our website to advise us of a change in circumstances that may change your land tax liability. An online application form will also be available should you wish to apply for an exemption from land tax.
Rented secondary dwellings
If there’s another dwelling on the same parcel as your principal place of residence, such as a granny flat, you only have to pay land tax while the other dwelling is being rented. The land tax payable is a proportion based on the rented floor area.
You’ll need to tell us that you’re renting a secondary dwelling.
Correcting an assessment
If you receive a land tax assessment for your property in error, please contact us for a review.
Responsibilities of agents
You are ultimately responsible for ensuring land tax is correctly paid, even if you use an agent to manage your property. If the agent fails to notify the ACT Revenue Office, you will be held responsible for the unpaid land tax plus any interest and penalties.
Certain types of residential land are exempt from land tax, such as property that serves as a retirement village or nursing home, or land that provides accommodation for a member of a religious organisation to perform his or her duties. Other land tax exemptions include:
- land used for rural purposes
- a broad acre subdivision
- a property with a guardian or manager for a person with a legal disability
- residential land that a trustee owns under the will of a deceased person and that a life tenant occupies
- residential land that a trustee or guardian owns on behalf of a person with a legal disability
- residential land that a not-for-profit housing corporation owns
An exemption on compassionate grounds may be available for up to one year on a rented residential property, if the Commissioner for ACT Revenue is satisfied that the owner is temporarily absent because of a compelling compassionate reason. To request this exemption, you must apply in writing to the commissioner .
Builders land tax exemption
Building or land-development corporations that own residential land can apply to the ACT Revenue Office for a potential two-year land tax exemption if they’re constructing new residential premises that they will sell when construction is complete. If eligible, the exemption goes into effect from the first day of the first quarter after the date of ownership.