The Victorian State Revenue Office (SRO) continues to target owners of properties earning rental income but not paying land tax. Typically this occurs where a property that has been a residence becomes a rental property. The information exchange between government departments now flows smoother than ever, allowing rental property details in a tax return to be easily matched against SRO data. In some instances, this has resulted in past years’ land tax being charged in one hit – a nasty shock for any property owner.
The more common land tax exemptions are those that apply to one’s home (the principal residence exemption) and to land used in a farming business (not a hobby farm). Where the use of the land changes, it is the responsibility of the land owner to advise the SRO. Unfortunately few in fact do, as they are not aware of this requirement.
There have been many such instances in the past which, without the data matching systems, have gone undetected. Not anymore, as a revenue-seeking SRO methodically works though its nest-egg of past years’ uncollected land tax. Anyone renting out a former home should be aware of the land tax obligations. If you expect that you may have inadvertently not paid past land tax, our office can help you make the appropriate disclosures so as to minimise penalties.