This is part 9 of our Land Tax Series which aims to deconstruct the various aspects of the complex land tax legislation.
To recap: land tax is a state and territory tax levied on the total taxable value of land held by taxpayers in particular jurisdictions. Land tax is assessed on a calendar year basis on the land you own at midnight on 31 December.
As with previous articles in this series our focus will be on the Victorian land tax provisions.
Can I object to my land tax assessment?
Yes. You have 60 days from receiving your land tax assessments to lodge an objection. If you’re outside of the 60-day time-frame, you can make an application to the State Revenue Office (SRO) for an out of time objection however the SRO is not bound to accept it.
Land tax assessments can be objected to for several reasons. The main basis for an objection are as follows:
Dispute as to the valuation applied to the relevant land;
Changes in factors affecting the landholdings of a taxpayer, for example removing land that you do not own or adding land you do own; and
A legal basis for the assessment, for example if you believe you qualify for an exemption from land tax.
We discuss each of these in further detail below.
Objections based on Valuations
As discussed in Part 5 of this Land Tax Series section 21(1)(a) of the Land Tax Act 2005 (LTA) provides that, for the purposes of assessing land tax, the Commissioner may use “valuations made by a valuation authority”. For the 2019 land tax years onwards, valuations of land have been conducted annually by the Valuer-General. The Valuer-General’s valuations are guided by the Valuation of Land Act 1960.
The valuation basis used for land tax purposes is the ‘site value’ of the land. ‘Site value’ references the value of the land without improvements. It assumes that the land is vacant and therefore does not include the value of buildings affixed to the land.
If you would like to object to the land site values contained in your land tax assessment you will need to identify why the value used is unreasonable. Some resources to consider in making this determination may include:
Seeking an independent market valuations or appraisal for the unimproved land as at 31 December of the prior year.
Considering historical council rates notices to compare the valuation of your land in prior years to determine if the change in values is in line with the market movements.
Comparing the sale price of similar properties in your local market that have been sold on or about the valuation date and comparing this to the underlying Site Value identified for your land. An example of a free resource for this is www.oldlistings.com.au.
Factor Changes
During a land tax year you may have acquired or sold land. Generally, as part of the sale process the Titles Office and in turn the SRO will be notified of these changes. However, in certain circumstances this may not occur and you might receive a land tax assessment which incorrectly identifies properties you own or alternatively you may not receive a land tax assessment at all.
In such circumstances taxpayers should contact the SRO to update their details or speak to their advisors for assistance. In the case where land tax has not been levied a shortfall may exist. By proactively disclosing this to the SRO before the commencement of an investigation penalties may be significantly lower.
Exemption not Applied
There are various exemptions that may apply to reduce your land tax liability. The most common are:
Land used as your principal place of residence (PPR) the criteria of which is discussed in Part 6 of this Land Tax Series;
Primary production land the criteria of which is discussed in Part 7 of this Land Tax Series; and
Land used by charities, sporting clubs and not for profits the criteria of which is discussed in Part 8 of this Land Tax Series.
Land tax exemptions are complex and recent litigation has added further complexity to the process of understanding and proving your eligibility. Our team can help you understand this and assist in applying for such exemptions and objecting to a denial of an exemption.
Taxation Appeals
In the first instance your objection will go to the Technical Advice and Review Branch (TARB) at the SRO. When a decision is made by TARB taxpayers have 60 days from receipt to object the matter further through the court system. This timeframe is fixed and the Commissioner does not have a discretion to extend the time period.
To object to a decision, you must write to the SRO (not directly to the court as they have no statutory power to accept a direct application from you) and ask that the Commissioner to:
refer the matter to the Victorian Civil and Administrative Tribunal (VCAT); or
treat the objection as an appeal to the Supreme Court of Victoria.
In requesting such actions, you must clearly step out the grounds for your objection. Where grounds are not specifically stated then you cannot rely upon them in the appeals process without special consent of VCAT or the Supreme Court. The objection should therefore be thorough and clear as to its grounds. We recommend seeking legal advice when preparing an objection.
The onus of proving your case remains with the taxpayer. We recommend speaking to a legal advisor to compile appropriate evidence and documents to support your position and strengthen your case.
Should you (or the Commissioner) be unhappy with the decision of VCAT or the Supreme Court then such decisions can be further appealed.
Whilst the objection is underway the liability to pay your land tax by the due date remains.
Dispute Resolution
In addition to formal dispute resolution the SRO offers an informal dispute resolution process. As part of this process additional information can be provided to the SRO as well as meetings held to discuss the disputed matters. This avenue is not aways appropriate where there is significant areas of disagreement. We recommend discussing this option with your lawyer to further understand its value in your case.
How can we help?
If you are considering objecting to your land tax assessment and would like to understand the process or your eligibility for exemptions contact a member of our specialist team:
Phil Broderick
Principal
M +61 419 512 801 | T +61 3 9611 0163
E: pbroderick@sladen.com.au
