Land Tax Management Act 1956 (NSW)

Land Tax Management Act 1956 No 26 An Act to make provision relating to the imposition, assessment and collection of a land tax upon unimproved values of certain lands; to repeal the Land and Income Tax Assessment Act of 1895 and certain other Acts; to amend the Landlord and Tenant (Amendment) Act 1948, as amended; and for purposes connected therewith. Part 1 Preliminary 1 Name of Act (1) This Act may be cited as the Land Tax Management Act 1956. (2) (Repealed) 2 Construction This Act shall be read and construed subject to the Commonwealth of Australia Constitution Act, and so as not to exceed the legislative power of the State to the intent that where any provision of this Act, or the application thereof to any person or circumstance is held invalid, the remainder of this Act, and the application of such provision to other persons or circumstances shall not be affected. 3 Definitions (1) In this Act, unless the context or subject-matter otherwise indicates or requires— Act includes regulations. Agent includes every person who in the State, for or on behalf of any person out of the State (in this definition termed "the principal") has the control or disposal of any land belonging to the principal, or the control, receipt, or disposal of any rents, issues, or proceeds derived from any such land. assessment means an assessment or reassessment by the Chief Commissioner under Part 3 of the Taxation Administration Act 1996. asset, of a sub-fund of a CCIV, has the same meaning as in the Corporations Act 2001 of the Commonwealth, section 1233H. CCIV means a corporate collective investment vehicle within the meaning of the Corporations Act 2001 of the Commonwealth. Chief Commissioner means the Chief Commissioner of State Revenue referred to in section 60 of the Taxation Administration Act 1996. Company includes all bodies or associations corporate or unincorporate. concessional trust has the meaning given by section 3B. Crown includes a statutory body representing the Crown. flat means a room or a suite of rooms (whether or not forming part of a building or a detached building)— (a) used or occupied as a separate dwelling, or (b) so constructed, designed or adapted as to be capable of being used or occupied as a separate dwelling. joint organisation has the same meaning as in the Local Government Act 1993. Joint owners means persons who own land jointly or in common, whether as partners or otherwise, and includes persons who have a life or greater interest in shares of the income from the land and persons who by virtue of this Act are deemed to be joint owners. lease includes an agreement to lease. liabilities, in relation to a sub-fund of a CCIV, has the same meaning as in the Corporations Act 2001 of the Commonwealth, section 1233L. member, in relation to a sub-fund of a CCIV, has the same meaning as in the Corporations Act 2001 of the Commonwealth, section 1222Q(3). Mortgage includes any charge whatever upon land, or interest therein, howsoever created, for the securing of money. Mortgagee includes every person entitled at law or in equity to a mortgage or any part thereof. Owned and similar expressions have a meaning corresponding with that of owner. Owner includes— (a) in relation to land, every person who jointly or severally, whether at law or in equity— (i) is entitled to the land for any estate of freehold in possession, or (ii) is entitled to receive, or is in receipt of, or if the land were let to a tenant would be entitled to receive, the rents and profits thereof, whether as beneficial owner, trustee, mortgagee in possession, or otherwise, (b) (Repealed) (c) in relation to any leasehold estate in land, whether legal or equitable (other than under any lease to which section 21C or 21D applies), a person, or a person who is a member of a class or description of persons, prescribed for the purposes of this paragraph, and (d) a person who, by virtue of this Act, is deemed to be the owner. Person includes a company. Planning instrument means an environmental planning instrument, within the meaning of the Environmental Planning and Assessment Act 1979, and includes a deemed environmental planning instrument within the meaning of that Act. Prescribed means prescribed by this Act or by the regulations thereunder. principal place of residence of a person means the one place of residence that is, among the one or more places of residence of the person within and outside Australia, the principal place of residence of the person. Public authority means a person or body declared by the regulations to be a public authority for the purposes of this Act. record means— (a) a documentary record, or (b) a record made by an electronic, electromagnetic, photographic or optical process, or (c) any other kind of record. referable, in relation to a sub-fund and a share in a CCIV, has the same meaning as in the Corporations Act 2001 of the Commonwealth, section 1230(1). Register means the Register of Land Values kept under section 14CC of the Valuation of Land Act 1916. Regulations means regulations made under this Act. Residential unit means a flat that— (a) forms part of a building comprising two or more flats, and (b) is used and occupied as a principal place of residence, and for no other purpose, by a person who is a joint owner (otherwise than as a trustee) of the parcel of land on which the building is erected and who has entered into an arrangement with the other joint owners of that land under which the person has the exclusive right to occupy that flat (whether jointly with one or more of the co-owners or not). special trust has the meaning given by section 3A. sub-fund, of a CCIV, has the same meaning as in the Corporations Act 2001 of the Commonwealth, section 1222Q(1). Tax year or Land tax year means a period of 12 months starting on 1 January for which land tax is leviable and payable. Taxpayer means any person chargeable with land tax. Trustee, in addition to every person appointed or constituted trustee by act of parties by order or declaration of a court or by operation of law, includes— (a) an executor or administrator, guardian, committee, receiver, or liquidator, and (b) every person having or taking upon himself or herself the administration or control of land affected by any express or implied trust, or acting in any fiduciary capacity, or having the possession, control or management of the land of a person under any legal or other disability. Trustee company means a trustee company within the meaning of the Trustee Companies Act 1964 or the NSW Trustee and Guardian. unit trust means a trust in respect of which the beneficiaries of the trust are owners of units in the trust and each unit holder, or each unit holder of a particular class— (a) is entitled, as a beneficiary of the trust, to participate in any income or capital distributions (or both) of the trust, and (b) the amount or proportion of any income or capital distribution to which the unit holder is entitled is based on the number or class of units owned by the person (or both). Note. The Interpretation Act 1987 contains definitions and other provisions that affect the interpretation and application of this Act. (2) For the purposes of the definition of Residential unit in subsection (1) a flat used and occupied as the person's principal place of residence by a person referred to in the definition does not cease to be used and occupied by that person as the person's principal place of residence and for no other purpose by reason of the occupation under lease or licence for residential purposes of not more than one room in the flat. (2A) (Repealed) (3) For the purposes of the definition of flat in subsection (1), a building, or part of a building, used and occupied for residential purposes does not cease to be considered to be used and occupied as a separate dwelling merely because the building, or part of the building, is used for the purpose of another residential occupancy, if that residential occupancy may be disregarded for the purposes of the principal place of residence exemption under Schedule 1A. (4) Notes included in this Act do not form part of this Act. (5) (Repealed) 3A Special trust—meaning (1) For the purposes of this Act, a trust is a special trust if— (a) the trust property includes land, and (b) the trustee of the trust is the owner of the legal estate in the land, and (c) the trust is not a fixed trust. (2) For the purposes of this section, a trust is a fixed trust if the equitable estate in all of the land that is the subject of the trust is owned by a person or persons who are owners of the land for land tax purposes (disregarding section 25 (3)). (3) For the purpose of determining whether a trust is a fixed trust under this section, any equitable interest of the trustee as trustee of the trust is to be disregarded. (3A) If a trust satisfies the relevant criteria, the persons who are beneficiaries of the trust under the trust deed are taken to be owners of an equitable estate in the land that is the subject of the trust and, accordingly, the trust is taken to be a fixed trust. Note. Under section 25, owners of an equitable estate or interest in land are liable in respect of land tax as if they were legal owners of the land. Owners of an equitable estate in land are treated as secondary taxpayers. (3B) For the purposes of this section, the relevant criteria are as follows— (a) the trust deed specifically provides that the beneficiaries of the trust— (i) are presently entitled to the income of the trust, subject only to payment of proper expenses by and of the trustee relating to the administration of the trust, and (ii) are presently entitled to the capital of the trust, and may require the trustee to wind up the trust and distribute the trust property or the net proceeds of the trust property, (b) the entitlements referred to in paragraph (a) cannot be removed, restricted or otherwise affected by the exercise of any discretion, or by a failure to exercise any discretion, conferred on a person by the trust deed, (c) if the trust is a unit trust— (i) there must be only one class of units issued, and (ii) the proportion of trust capital to which a unit holder is entitled on a winding up or surrender of units must be fixed and must be the same as the proportion of income of the trust to which the unit holder is entitled. (4) A trust is not a special trust— (a) if the trust is solely a charitable trust, or (b) if clause 9 of Schedule 1A applies in respect of the land that is the subject of the trust, or (c) if the trust is a concessional trust, or (d) in relation to any land tax year in which it is a superannuation trust, or (e) if the trust is established by will, but only during the period ending on the expiration of 2 years after the date of death of the testator, or (f) in relation to any land tax year in which it is a family unit trust, as provided by Schedule 1AA. (5) For the purposes of this section, a trust is a superannuation trust in relation to a land tax year if— (a) the trust was established on or before 30 June in the year before that land tax year and, in relation to the year of income ending in that year, the trust is— (i) a complying superannuation fund (within the meaning of section 42 or 42A of the Commonwealth Act), or (ii) a complying approved deposit fund (within the meaning of section 43 of the Commonwealth Act), or (iii) a pooled superannuation trust (within the meaning of section 44 of the Commonwealth Act), or (b) the trust was established after 30 June in the year before that land tax year and, as at midnight on 31 December in that year, the trust is— (i) a regulated superannuation fund (within the meaning of the Commonwealth Act) or is taken to be a regulated superannuation fund under that Act, or (ii) an approved deposit fund (within the meaning of the Commonwealth Act), or (iii) a pooled superannuation trust (within the meaning of the Commonwealth Act). (6) Despite anything to the contrary in this section, a trust is taken to be a special trust in relation to a land tax year if the trust is classified as a special trust in respect of that land tax year under section 25A, and the classification has effect in respect of that land tax year. (7) In this section— Commonwealth Act means the Superannuation Industry (Supervision) Act 1993 of the Commonwealth. 3B Concessional trust—meaning (1) For the purposes of this Act, a trust is a concessional trust if— (a) the trust property includes land, and (b) each person who is a beneficiary of the trust is— (i) a person under the age of 18 years, or (ii) a person in respect of whom a guardianship order is in force under the Guardianship Act 1987, or (iii) a person in the relevant group within the meaning of the Coroners Act 2009. (2) For the purposes of this section, a person is a beneficiary of a trust if the person is a person, or a member of a class of persons— (a) in whose favour, by the terms of the trust, capital or income the subject of the trust may be applied— (i) in the event of the exercise of a power or discretion in favour of the person, or (ii) in the event that a discretion conferred under the trust is not exercised, or (b) entitled or permitted, under the terms of the trust, to use and occupy land that is the subject of the trust. (3) For the purposes of this Act— (a) a special disability trust (within the meaning of section 1209L of the Social Security Act 1991 of the Commonwealth or section 52ZZZW of the Veterans' Entitlements Act 1986 of the Commonwealth) is taken to be a concessional trust, and (b) the principal beneficiary of the special disability trust, as referred to in section 1209M of the Social Security Act 1991 of the Commonwealth or section 52ZZZWA of the Veterans' Entitlements Act 1986 of the Commonwealth, is taken to be a beneficiary of the trust. 3C Application of Act to corporate collective investment vehicles (1) For this Act, each sub-fund of a CCIV is taken to be a unit trust of which— (a) the CCIV is the trustee, and (b) the business, assets and liabilities of the sub-fund are the trust property, and (c) the members of the sub-fund are the beneficiaries. (2) For a sub-fund that is taken to be a unit trust— (a) a share in the CCIV that is referable to the sub-fund is taken to be a unit in the unit trust, and (b) a shareholder of the share, as a member of the sub-fund, is taken to be a unit holder of the unit in the unit trust, and (c) the rights, entitlements, obligations and other characteristics attaching to the share are taken, as far as practicable, to be the same rights, entitlements, obligations and other characteristics attaching to the unit. (3) For this Act, a CCIV is taken to be a separate person in relation to each unit trust of which it is the trustee under subsection (1). (4) This Act does not apply to a CCIV or the members of a sub-fund of a CCIV except as provided for by this section. (5) Despite another provision of this Act, a sub-fund of a CCIV, taken to be a unit trust under this section, is taken to be a special trust. Part 2 Administration 4 Taxation Administration Act 1996 This Act is to be read together with the Taxation Administration Act 1996 which makes provision for the administration and enforcement of this Act and other taxation laws. 4A–6 (Repealed) Part 3 Land tax 7 Land tax on taxable value of land Land tax at such rates as may be fixed by any Act is to be levied and paid on the taxable value of all land situated in New South Wales which is owned by taxpayers (other than land which is exempt from taxation under this Act). 8 Date of ownership for purposes of land tax Land tax shall be charged on land as owned at midnight on the thirty-first day of December immediately preceding the year for which the land tax is levied. In this section year means the period of twelve months commencing on the first day of January. 9 Taxable value (1) Land tax is payable by the owner of land on the taxable value of all the land owned by that owner which is not exempt from taxation under this Act. (2) The taxable value of that land is the total sum of the average value of each parcel of that land. (3) The average value of a parcel of land is to be calculated, as provided for by section 9AA, on the basis of the land value of the land. (4) The land value of land, in relation to a land tax year, is the value entered in the Register as the land value of the land as at 1 July in the previous year. (5) The fact that there is no land value entered in the Register on 31 December in a year as the land value of the land as at 1 July in that year does not prevent land tax being levied and charged and becoming payable for any following tax year once that land value is entered in the Register and the average value is ascertained. 9AA Average value of land (1) For the purposes of this Act, the average value of a parcel of land is the average of the land value of the land in relation to the year for which the average value is being ascertained (the current land tax year) and the land value of the land in relation to the 2 preceding land tax years (the preceding land tax years). (2) If a land value adjustment is required in relation to a parcel in the current land tax year, the average value is to be determined before that land value adjustment is made (that is, on the basis of the land value without that land value adjustment) and, despite any other provision of this Act, the Valuation of Land Act 1916 or the Heritage Act 1977, the land value adjustment is to be applied, for the purpose of assessing land tax, to the average value of the land for that land tax year (and not the land value). (3) For the purposes of this section, a land value adjustment is— (a) a land value reduction, being any reduction that is required to be made to the land value of land under this Act for the purpose of assessing land tax, or (b) (Repealed) (c) a special allowance, being any allowance made in respect of the land value of land under Division 3 or 4 of Part 1B of the Valuation of Land Act 1916. (4) In the case of a land value reduction, the land value adjustment is to be applied to the average value of land by applying any provision of this Act that specifies that the land value is to be reduced for the purpose of assessing land tax as if a reference to the land value of land were a reference to the average value of land. Note. For example, the reductions provided for by sections 9A, 9BA, 9C, 9D, 9E, 10 (2), (2A) and (2C), 10Q (4) and 10R (3) will now apply to the average value of the land in a land tax year and not to the land value of the land. (5) (Repealed) (6) In the case of a special allowance, the land value adjustment is to be applied to the average value of the land by deducting the allowance from the average value. (7) If a parcel of land did not exist on 31 December immediately before either or both of the preceding land tax years, the average value of the land is taken to be— (a) if the parcel did exist on 31 December immediately before one of the preceding land tax years—the average of the land value of the land in relation to the current land tax year and the land value of the land in relation to the preceding land tax year immediately before which it did exist, or (b) in any other case—the land value of the land in relation to the current land tax year. (8) Subsection (2) applies in relation to an average value determined as provided for by subsection (7) in the same way as it applies to an average value determined as provided for by subsection (1). Note. For example, if the newly created parcel qualifies for an allowance for subdivision under Division 4 of Part 1B of the Valuation of Land Act 1916 in the current land tax year, the allowance would be applied to the average value calculated as provided for by subsection (7). (9) The average value of a parcel of land that is heritage-protected, and that was not heritage-protected on 31 December immediately before either or both of the preceding land tax years, is to be determined as provided for by subsection (7) (as if the parcel did not exist on the date or dates of 31 December on which it was not heritage-protected). (10) If the land value of land in relation to a land tax year is altered (whether as a result of being reascertained or on objection or appeal or for the correction of a clerical error or misdescription), the average value of the land must be reascertained on the basis of the altered land value. (11) If the average value of a parcel of land, after applying a land value adjustment, is less than zero, the average value of the parcel is taken to be zero. (12) For the purposes of this section, land is heritage-protected if it is either heritage restricted (within the meaning of section 14G of the Valuation of Land Act 1916) or the subject of a heritage valuation under Division 6 of Part 6 of the Heritage Act 1977, or both. 9A Concession for unutilised land value (1) This section applies to land if an unutilised value allowance (as ascertained under Division 3 of Part 7) is entered in the Register in respect of the land. (2) For the purpose of assessing land tax, the land value of the land is to be reduced by the unutilised value allowance. (3) However, if the land is sold or otherwise disposed of or it ceases to be used or occupied solely as the site of a single dwelling-house, a person whose liability to pay land tax in respect of the land has been assessed in accordance with this section must, within 1 month, inform the Chief Commissioner of the date on which the land was sold or otherwise disposed of or ceased to be so used or occupied. (4) Liability for land tax in respect of the year in which the land is sold, disposed of, or ceases to be used or occupied solely as the site of a single dwelling-house, and in each of the preceding years (up to a maximum of 4 preceding years) in which the person's liability to pay land tax was assessed in accordance with this section is to be reassessed as if subsection (2) had not applied to the land. (5) For the purposes of section 9 (3) (c) of the Taxation Administration Act 1996, any such reassessment is authorised to be made more than 5 years after the initial assessment. (6) Any such re-assessment is not a relevant land tax assessment for the purposes of section 35 (1) (b) of the Valuation of Land Act 1916 if it is based on the same land value or average value on which the original land tax assessment was based (before the reduction was made under subsection (2) of this section). (7) In this section, single dwelling-house has the same meaning as in Division 2 of Part 8 of Chapter 15 of the Local Government Act 1993. 9B Strata (1) Land tax, in the case of land subject to the Strata Schemes Development Act 2015, is to be levied and paid in respect of each lot comprised in a parcel. (2) For the purposes of this Act— (a) the land value of a lot comprised in a parcel is an amount that bears to the land value of the parcel (within the meaning of section 9 (4)) the same proportion as the unit entitlement of the lot bears to the aggregate unit entitlement, and (b) the average value of the lot is to be ascertained on the basis of the land value of the lot, as determined under paragraph (a). (3) Expressions used in this section have the same meanings as in the Strata Schemes Development Act 2015. 9BA Colliery holdings For the purpose of assessing land tax, the land value of land within a colliery holding (within the meaning of the Mining Act 1992) is to be reduced by the amount recorded in the Register in relation to each parcel as the amount by which the presence of coal in that parcel increases the value of that parcel. 9C Reduction in land value for flats on mixed development land or mixed use land (1) For the purpose of assessing land tax, the land value of mixed development land or mixed use land on which is situated a flat is to be reduced by the allowable proportion in relation to the flat. (2) The allowable proportion for a flat is as determined in accordance with whichever of the following paragraphs is applicable in the particular case— (a) if there is an apportionment factor entered in the Register in respect of that land value—the proportion determined in accordance with the following calculation— (b) if paragraph (a) is not applicable—the proportion specified in an application for a reduction under this section as the fair and reasonable proportion of the land value of the land to be attributed to the flat, subject to subsections (2A) and (2AA). (c) (Repealed) (2A) If there is no apportionment factor entered in the Register in respect of the land value of the land, the Chief Commissioner may request the Valuer-General to determine the apportionment factor in respect of the land concerned. (2AA) If a request is made under subsection (2A)— (a) the Valuer-General must determine the apportionment factor concerned and enter it in the Register, and (b) the allowable proportion for the flat must be determined in accordance with subsection (2) (a). (2AB) Apportionment factors for the purposes of this section are to be ascertained in accordance with Division 5 or Division 5A of Part 1B of the Valuation of Land Act 1916, as appropriate to the land concerned. If such an apportionment factor is expressed as a percentage, the apportionment factor is, for the purposes of this section, to be converted to a fraction. Note. Divisions 5 and 5A of Part 1B of the Valuation of Land Act 1916 allow objections to be made against the amount of an apportionment factor. (2AC) (Repealed) (3) The reduction under this section applies only if the following requirements are satisfied— (a) the flat must be used and occupied by the owner of the land (or one of the owners) as his or her principal place of residence and for no other purpose, in which connection the use of the land for the purpose of one, but not more than one, residential occupancy other than that of the owner under lease or licence from the owner may be disregarded if it is an excluded residential occupancy (within the meaning of clause 4 of Schedule 1A), (b) (Repealed) (c) an owner of the land who occupies the flat must not be an owner merely because of being a trustee, (d) the land must not be owned, or jointly owned, by a person in the person's capacity as trustee of a special trust, (e) the owner of the land must not be a company or company jointly with another person or other persons, except in either case a trustee company acting in its representative capacity. (4) For the purposes of determining whether a flat has been used and occupied by an owner of land as his or her principal place of residence under subsection (3) (a), clauses 8, 9 and 10 of Schedule 1A apply in respect of the flat, and that part of the land on which the flat is situated, in the same way as they apply in respect of land under the principal place of residence exemption. Note. The effect of this provision is to deem a flat to be used and occupied by the owner of the land as a principal place of residence in certain circumstances, similar to the principal place of residence exemption. As a consequence, the land value of the mixed development land or mixed use land on which the flat is situated can be reduced by the allowable proportion under this section. (5) Unless the land concerned is land to which subsection (2) (a) applies, there is to be no reduction under this section unless— (a) application has been made for the reduction by all the owners of the land, specifying the proportion that in their opinion is a fair and reasonable proportion of the land value of the land to be attributed to the flat, and (b) the application is made in a form approved by the Chief Commissioner. (6) There is to be no reduction under this section if the building on the land, or the buildings on the land together, comprise 2 flats and the land is exempted from taxation under this Act. (6A) For avoidance of doubt, if a reduction in the land value of land is required under this section and the land is jointly owned, then, for the purposes of section 27 (3) (a), the individual interest of each of the owners of the land (including the owner who occupies the flat) is to be assessed on the basis of the land value of the land as reduced under this section. (7) This section does not apply to land to which section 9D or 21B applies. (8) In this section— mixed development land has the same meaning as in Division 5 of Part 1B of the Valuation of Land Act 1916. mixed use land has the same meaning as in Division 5A of Part 1B of the Valuation of Land Act 1916. 9D Reduction in land value for single dwellings on mixed use land (1) For the purpose of assessing land tax, the land value of mixed use land on which is situated one single dwelling is to be reduced by the allowable proportion in relation to the dwelling. (2) The allowable proportion for the dwelling is to be determined in accordance with whichever of the following paragraphs is applicable in the particular case— (a) if there is an apportionment factor entered in the Register in respect of that land value—the proportion determined by deducting that apportionment factor from 1, (b) if paragraph (a) is not applicable—the proportion specified in an application for a reduction under this section as the fair and reasonable proportion of the land value of the land to be attributed to the dwelling, subject to subsections (3) and (4). (3) If there is no apportionment factor entered in the Register in respect of the land value of the land, the Chief Commissioner may request the Valuer-General to determine the apportionment factor in respect of the land concerned. (4) If a request is made under subsection (3)— (a) the Valuer-General must determine the apportionment factor concerned and enter it in the Register, and (b) the allowable proportion for the dwelling must be determined in accordance with subsection (2) (a). (5) Apportionment factors for the purposes of this section are to be ascertained in accordance with Division 5A of Part 1B of the Valuation of Land Act 1916. If such an apportionment factor is expressed as a percentage, the apportionment factor is, for the purposes of this section, to be converted to a fraction. Note. Division 5A of Part 1B of the Valuation of Land Act 1916 allows objections to be made against the amount of an apportionment factor. (6) The reduction under this section applies only if the following requirements are satisfied— (a) the single dwelling must be used and occupied by the owner of the land (or one of the owners) as his or her principal pla