Do You Pay Land Tax On Your Place Of Residence In Australia? (How To Get Exemption From Land Tax)

Do You Pay Land Tax On Your Place Of Residence In Australia

Owning a home is a significant milestone in Australia, but it also comes with responsibilities like land tax.

This tax can be confusing, especially when it comes to your principal place of residence (PPR).

So we decided to share a dedicated blog to clear things up for everyday Australians by explaining:

  • When you don’t have to pay land tax on your home (PPR exemption)
  • The different scenarios for claiming the PPR exemption
  • What happens if your situation changes (moving, renovations, etc.)

Let’s get started!

The Principal Place Of Residence Exemption

The good news for most homeowners is that you likely qualify for an exemption from land tax on your PPR. This means you won’t have to pay land tax on the value of your home as long as you meet specific criteria.

Who Qualifies?

To be eligible for the PPR exemption, your property must meet the following requirements:

  • The Land: There must be a building on the land designed and built primarily for residential purposes. For newly built homes, this means you need a certificate of occupancy.
  • Your Occupancy: Generally, you (the individual owner) or a vested beneficiary of an eligible trust must live on the land for at least 6 months from July 1st of the year before the assessment to qualify.

While the PPR exemption is generally available for individual owners, there are specific cases where other entities can also claim the exemption:

Eligible TrusteesTrustees of certain trusts where a vested beneficiary uses the land as their PPR
Individuals with DisabilitiesImmediate family members who own the land where a qualifying person with a disability resides
Right to ResideIndividuals granted the right to reside on the land under a will or testamentary instrument
Life EstatesIndividuals granted a life estate under a will or other means

Can You Claim The Exemption On More Than One Property?

Usually not. The PPR exemption applies to one property at a time. If you own multiple properties and live in each throughout the year, only one can be your PPR for land tax purposes.

There are, however, some exceptions:

  • Contiguous Land: Land adjoining your PPR (like a backyard) might be exempt if it enhances your residence and isn’t used for separate living. This exemption is limited in some areas, so check with your state revenue office.
  • Moving Between Homes: A temporary exemption might apply if you’re buying a new home and haven’t sold your old one yet, or vice versa.

What If Your Situation Changes?

There are various situations that can affect your PPR exemption. 

Here are some of the common scenarios:

  • Temporary Absence: If you need to be away from your home for work or other reasons, you might still qualify for the exemption as long as it’s temporary, you intend to return, and you don’t rent it out for more than 6 months in the previous tax year.
  • Loss of Independence: The exemption can apply if you move to a nursing home or require full-time care while still owning your PPR.
  • Unfit for Occupation: If your home is damaged by a natural disaster or accident and becomes unlivable, the exemption might continue for up to 2 years while repairs are done.
  • Construction or Renovation: A new exemption applies to land where your PPR is being built or renovated. This exemption is available for up to 4 years, with extensions possible.

Applying For The PPR Exemption

If your property becomes your principal place of residence and you meet the eligibility criteria, you can apply for the PPR exemption online via My Land Tax or by calling the State Revenue Office on 13 21 61.

It’s essential to notify the authorities when you no longer occupy the land as your PPR, as failure to do so may result in penalties and interest charges.

Partial Exemptions And Special Cases

In certain scenarios, you may be eligible for a partial exemption or require special consideration:

  1. Partial exemption if the land is used for business purposes
  2. Partial exemption if a separate residence on the PPR land is leased
  3. Partial exemption or refund for trustees with multiple vested beneficiaries
  4. Temporary absences from the PPR (e.g., working interstate or overseas)
  5. Loss of ability to live independently (e.g., moving to a care facility)
  6. PPR land becoming unfit for occupation (e.g., due to natural disasters)
  7. Construction or renovation of a new PPR

Unsure About Land Tax On Your Home? KPG Taxation Can Help!

Understanding land tax can be confusing, especially when it comes to your main house. The good news is that you probably don’t have to pay land tax on the place you live! This blog explained the “principal place of residence” (PPR) exemption, which means you can live in your home without paying extra land tax.

But there can be some tricky situations, like moving or renovating. If you’re worried about whether you qualify for the PPR exemption, or you just want to be sure you’re doing things right, KPG Taxation can help.

Our friendly team of tax accountants can:

  • Explain the PPR exemption in a way that’s easy to understand
  • Help you figure out if you qualify
  • Advise you on what to do in special situations

Don’t let land tax add stress to home ownership. Contact KPG Taxation today for a free consultation. We’ll help you save money and navigate the land tax system with ease.

Consulting with KPG Taxation

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