Receiving your annual land tax assessment is never welcome. Even with effective land tax planning strategies, the cost of land tax is a significant burden on families in businesses with substantial land holdings. And even if you can pass on land tax to your tenants, your customers and tenants carry the cost, which is reflected in the net rent they can pay to you.
However, you can object to a land tax assessment. RevenueWA can and does get it wrong, and there is a formal process for objecting to your land tax assessment.
Who is RevenueWA?
RevenueWA was previously labelled the Office of State Revenue. They are the government department responsible for administering the collection and recovery of State Taxes.
RevenueWA also has other responsibilities to the WA government. A primary duty for RevnenueWA is the assessment and collection of land tax.
What is land tax?
Land tax is, unsurprisingly, a tax on the land you own. While this comment seems obvious, many tax accountants in Perth miss the more profound point. Land tax does not apply to buildings and improvements. It applies to land and land only.
Is all land subject to land tax?
Land tax does not apply to the family home or agricultural land. Both exemptions are essential to consider when structuring your overall tax affairs. In some instances, the early rezoning of land from agricultural to industrial should be delayed until other forces are lined up to continue enjoying the exemption. Or the family home might be placed under a natural person’s name, even though it might be a riskier outcome for asset protection.
A deceased estate can also enjoy a land tax exemption, as can people moving, building, or renovating homes.
There is also a proposal for a 50% land tax reduction for build-to-rent properties.
Understanding the exemptions and how you can structure-property to reduce land tax is an important part of the services provided by Westcourt or any Perth tax accountant.
How is land tax calculated?
Land tax is calculated by applying marginal land tax rates to the aggregated unimproved value of land that you own.
The current land tax rates are:
| Aggregated taxable value of land | Rate of land tax |
| $0 – $300,000 | Nil |
| $300,001 – $420,000 | $300 |
| $420,000 – $1,000,000 | $300 + 0.0025 dollars for each $1 over $420,000 |
| $1,000,000 – $1,800,000 | $1,750 + 0.009 dollars for each $1 over $1,000,000 |
| $1,800,000 – $5,000,000 | $8,950 + 0.018 dollars for each $1 over $1,800,000 |
| $5,000,000 – $11,000,000 | $66,550 + 0.02 dollars for each $1 over $5,000,000 |
| $11,000,000 + | $186,550 + 0.0267 dollars for each $1 over $11,000,000 |
What if you disagree with the land valuation?
The value of your land is set by The Valuer-General (Landgate). RevenueWA, which issues the land tax assessment, is not actually setting the value of your land. Objecting straight to RevenueWA for a disagreement about the value of your land will not help.
If you object to the value of your land you should write to:
The Valuer-General
Landgate – Valuations and Property Analytics
PO Box 222
Midland WA 6936
Providing evidence as to why the valuation is wrong is important if you object. Simply thinking that it is incorrect based on your knowledge is not appropriate. A clear argument with evidence and reasons for the objection is critical.
What if the land Tax Assessment is wrong
Not all land tax assessments are related to the value of the land. Sometimes land is held in different trusts that are not fully reflected in Landgate records, or the use of the land at 30 June might have been for a purpose other than that assessed by RevenueWA.
For example
Tracey owns a commercial property in her name that RevenueWA assesses for land tax.
Tracey has also inherited vacant residential land as trustee for her two young children. The land is now owned through a testamentary trust, and Tracey continues to hold it in a testamentary trust as she likes the benefits and advantages.
The land held on trust is a separate owner for land tax and this is a potential ground for Tracey to object to RevenueWA. In this case, a copy of the will, the trust deed under the will and the trust financial statements would be part of the records to show RevenueWA that Tracey, in her own right, does not own both properties would be part of the evidence for her objection.
For example
Jonathon owns a rental property in Perth. In December, he moved back from Sydney and into the rental property, which is his home.
RevenueWA are unaware that Jonathon now lives in the rental property and issue a land tax assessment.
Jonathon could show RevenueWA a copy of his driver’s license with his residential address, electoral records, bank statements and ASIC registers to show that he was living in the home at 30 June.
What objections grounds will fail?
If you object to your land tax assessment because land tax is not a fair tax you will fail. RevenueWA administers the law as set by parliament.
Politicians set the decision to apply land tax.
Further, if you think RevenueWA will do the groundwork for you and gather evidence or try to make your objection workable, you will also fail.
How long do I get to object to a Land Tax Assessment
If you receive a land tax assessment, you have 60 days to object to that assessment.
What if RevenueWA makes a mistake?
If you receive an understated land tax assessment, it is your responsibility to notify RevenuWA that you have land tax to pay. Noticing that RevenueWA has missed a property is not a reason to celebrate – it is still your responsibility.
Do I need to pay land tax when I object to it?
You can object to a land tax assessment if you disagree with it. However, just because you object to a land tax assessment issued by RevenueWA does not mean you can defer the payment.
You must still pay RevenueWA the land tax assessed to you. You can then object to that land tax assessment. If your objection is successful, you will be repaid the difference between the new assessment and your original payment (plus interest).
How can I delay payment of my land tax assessment?
If you want more time to pay your land tax assessment with RevenueWA, you can apply for a payment arrangement in writing.
An application for a payment arrangement must include:
- Why are you seeking the arrangement?
- How much funds you have available to pay the assessment?
- What type of arrangement do you propose?
RevenueWA will consider your past payment history, whether your debt will decrease moving into the future, the likelihood of getting paid, and the degree of financial hardship you are experiencing.
Getting help with land tax
Land tax is just one of the taxes families in business must consider when structuring their property portfolios. With a range of taxes, including GST, fringe benefits tax, payroll tax, income tax, superannuation taxes, capital gains tax, and transfer duty, the tax structuring process must encompass all taxes and consider the long-term strategy of the family in business with their property portfolios.
The tax structuring advice must then be folded into the longer-term purpose of the business family. This can include estate planning, family goals, exit strategies, asset protection, cost of administration, and ease of operation (the ease of administering entities is significantly reduced through cloud accounting).
This is where Westcourt is different. As a firm only focused on families in business and providing independent advice, a Xero Platinum Partner, deep global networks through GGI Global, and a proven track record of technical excellence in taxation, we are a natural choice for families looking to increase their after-tax investment returns and reduce tax liabilities like land tax—so why not call us today?
