NSW Land Tax Objections

The NSW Valuer General (VG) manages and oversees the land valuation process.
Revenue New South Wales (RNSW) manages the collection of all land tax revenue and manages the land tax objection process.

Extensions are granted at the discretion of the Commissioner only in exceptional circumstances.

Yes. Objections can be filed by solicitors, accountants and other agents on behalf of a taxpayer.

Land Tax Assessments are issued on an annual basis.
The Land Tax Assessment shows the name of the taxpayer, the total annual tax liability, any allowances granted and the date for payment of the assessment. It also shows the property value for the previous 3 years, and the average value applied for assessment purposes for the relevant year of assessment.

The Notice of Valuation shows details of the owners and their postal address, the property address and property description details as recorded on the Register of Land Values, the land value as at 1 July in the valuing year, the date of the valuation and the last date on which an objection can be filed.

Grounds for objection can be found in the NSW Valuation of Land Act:

Most land is valued using the “mass valuation” approach, where properties are valued in groups called “components”.
The properties in each component are similar or are expected to reflect changes in value in a similar way.
A basket of representative properties are selected from components and individually valued each year to determine how much the land value has changed from the previous year.

During the valuation process, valuers analyse sales of both vacant land and improved properties, making adjustments for the added value of improvements.
The value of improvements is their worth as reflected by the real estate market in an area (not necessarily their replacement or insurance value). This change is then applied to all properties in the component to determine their new land values.
Factors such as the location of the land, the land size, shape and features, the local zoning applicable to the land, heritage restrictions, and nearby development and infrastructure are taken into account.

Taxpayers must clearly indicate on the valuation objection form the ground(s) on which an objection is based.
Taxpayers must provide evidence to support any objection. Strong supporting evidence is sale prices of comparable properties prepared by a licensed valuer.
Factors such as your personal circumstances, council rates or land tax liability are not considered during the objection review process.

It is highly unlikely that your property would have been inspected for valuation purposes, unless it was one of the representative properties selected within the relevant component code.

An objection must be filed by the due date. A representative from RNSW will confirm receipt in due course. They may seek further valuation or other information in support. Their contract valuers may wish to inspect the property and/or meet with you to discuss your objection and the valuation evidence submitted in support.

That depends on the nature and complexity of the objection, and whether or not the Department of Lands’ contract valuer requires further information and/or to meet with the taxpayer in connection with the objection. It could take many months.

The taxpayer (or DLS, if we are the lodging party) will be notified accordingly.
A new land tax may issue, depending on the circumstances. A refund of any overpaid land tax will be issued. You then have a right to appeal the determination if you are not satisfied with it in whole or part.

The taxpayer (or DLS, if we are the lodging party) will be notified of the determination. The objection may be disallowed in whole or in part. Reasons may or may not be given for the determination.
You have a right of appeal, within 60 days of the date of the notice of determination of the objection.

No. The land tax is due and payable by the due date, whether or not an objection has been filed. Interest is payable if land tax is not paid by the due date.
RNSW will commence proceedings to recover outstanding land tax. In extreme circumstances RNSW may even place a caveat on the title to the property to protect its position.

We can:
– Act on your behalf in preparing objections and liaising with RNSW in relation to your objection.
– Review your position to ascertain whether any statutory allowances or exemptions apply.
– Review and advise on any disallowance of your objection.
– Consider the merits of an appeal against any disallowance.
– Assist with re-structuring your affairs to minimise land tax exposure.

Yes. New rules came into existence in June 2016.

If you are defined as a “foreign person” who owns “residential land” in NSW, then you must pay a land tax surcharge.

The definition of “foreign person” is extremely broad and includes foreign individuals, corporations, trusts and governments.

Each of the following for instance is a “foreign person” for the purposes of the surcharge:

• an individual who is not “ordinarily resident” in Australia
• a corporation in which an individual “not ordinarily resident” in Australia (or a foreign corporation or foreign government) holds a “substantial interest”
• a corporation in which two or more persons, each of who is not “ordinarily resident” in Australia (or a foreign corporation or foreign government) hold an “aggregate substantial interest”
• a trustee of a trust in which an individual “not ordinarily resident” in Australia (or a foreign corporation or foreign government) holds a “substantial interest”
• certain partnerships where at least 20% of the interest in the partnership is held by an individual not “ordinarily resident” in Australia (or a foreign corporation or a foreign government)
• a foreign government
• a foreign government investor

There are specific provisions in the legislation dealing with the meaning of “ordinarily resident”, “substantial interest”, “aggregate substantial interest” and “residential land”.

The surcharge does not apply to Australian citizens (even if the individual holds dual citizenship).

Please contact us for further detailed information on whether the surcharge applies to your circumstances.

If you are defined as a “foreign person” who owns residential land in NSW, then you must pay a land tax surcharge.

This surcharge is in addition to any other land tax you may be liable to pay.

The surcharge rate is:

• 0.75 per cent from the 2017 land tax year; and
• 2 per cent from the 2018 land tax year onwards.

You must pay the surcharge on the taxable value of all “residential” land that you own as at 31 December each year.

• A principal place of residence exemption may apply in certain circumstances – please contact us for further assistance in that regard.
• You may be required to pay the surcharge even if you do not pay land tax.

The surcharge is assessed in relation to each parcel of “residential land” and is proportional to ownership.

• There are no joint assessments and secondary deductions do not apply.
• There is no tax-free threshold applicable to the surcharge.

Please contact us for further detailed information on whether the surcharge applies to your circumstances.

No. The surcharge purchaser duty is a separate surcharge and must be considered if a “foreign person” is intending to purchase “residential land” in NSW.

Other “dutiable transactions” (as defined in the NSW Duties Act) may also attract the surcharge purchaser duty.