Be aware of absentee owner surcharge changes, warns Parke Lawyers
Recent changes to the absentee owner surcharge (an increased land tax liability that applies to Victorian land owned by an absentee owner), highlight the need for property investors to seek up to date financial and legal advice, according to Parke Lawyers.
The latest amendments to the Land Tax Act 2005, which came in to effect as from 19 December, extend the existing exemption available to absentee corporations conducting a commercial operation in Australia, to absentee trusts, subject to guidelines to be published by the Treasurer. The changes also affect how absentee owner surcharge liability is calculated for land held under a chain of trusts.
These changes to surcharge laws and the separate introduction of the Vacant Residential Land Tax to come into force on 1 January 2018, highlight the importance of owners and investors engaging professional assistance to protect their legal and financial position, Parke Lawyers Managing Director Jim Parke says.
Subject to certain exemptions, an absentee owner surcharge increases land tax on Victorian land owned by an absentee person – be they an individual, corporation or trust – who owns property.
For non-citizens or permanent residents who do not ordinarily reside in Australia, are absent from Australia on December 31 or for six months in one year; the surcharge will apply in the next land tax year.
The surcharge is calculated on the total taxable value of Victorian land owned and will be included in the Victorian land tax assessment.