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NEWSLETTER
January 2021 is well and truly underway and here are the top 3 things that I have noticed:
- Low stock levels for sale properties
- Decreased demand for entry level rental properties... likely as people are sharing homes or moving back with parents
- Very high demand for large and luxurious 2 and 3 bedroom apartments for rent
Hall and Wilcox (Hall & Wilcox 2019), have written an interesting article on the current changes to Land Tax within Victoria, which I have shared below.
Article : The 'Tennis Court Tax'
Who was exempt from land tax?
Land that a person owns and occupies as their home or principal place of residence is generally exempt from land tax. In Victoria, this has also extended to separately titled land that was ‘contiguous’ with your principal place of residence, did not contain another residence and was used for domestic purposes together with your home.
What is contiguous land?
Contiguous land is the adjoining land or land separated only by a road or other similar area across which movement is reasonably possible.
E.g. separately titled tennis court, swimming pool or extended garden beside the title on which your house is located on.
What has been changed?
From 1 January 2020, separately titled contiguous land in metropolitan Melbourne will no longer be included in the exemption that applies for a principal place of residence. Therefore, only the title that has your principal place of residence located on it will remain exempt from land tax.
Example:
Novak owns a house in South Yarra and a separately titled block next to it with a tennis court and a small shed with his tools. The site value of the block with the tennis court and shed is shown on Novak's rate notice as $2 million.
Novak owns an investment property in Richmond with a current site value of $2 million.
As Novak's contiguous land is used for private purposes and does not have another dwelling on it, it has until now, been exempt from land tax with his home. He has only paid land tax on his property investment, which would incur $11,975 of land tax for the 2020 tax year in isolation.
If Novak continues to hold the tennis court block on a separate title, it will be aggregated with the investment property in his 2020 Land Tax Assessment Noticce and his total liability for the year will be $47,475.
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