Many landowners are unaware of their rights to object to the land tax assessments each year that can save thousands, depending on their property holdings. In 2005 and with the recent issuing of assessments, a growing number of property owners were alarmed by the sudden increases in their assessments and as a result an increasing number of objections have been received.

In NSW, the Department of Lands is responsible for determining land values on behalf of the Valuer General. A land value refers to the dollar value of the land only and does not include any improvements on the land. The determined land value is utilised to calculate rates and taxes.

According to the NSW Department of Lands, average land values in the Sydney metropolitan region have increased approximately 12% per annum since 1996, compared to 20% on average over the same for NSW Country Single Dwelling sites in Coastal Cities and Towns, as evidenced below. This doubling in values in less than 8 years has been largely a result of the increasing supply constraints in the Sydney Metropolitan region and has impacted upon affordability. However many landowners are unaware of their increasing responsibilities.

In the 2005/06 NSW Government Budget, the land tax rate climbed from 1.4% to 1.7%. To ease the burden on many small property investors, in January 2006, the tax-free threshold for land tax was increased from $330,000 to $352,000. This being a 6.7% increase matching the average increase in the value of the land subject to land tax.

However, taxpayers would still be hit with a 21% increase in their tax bills because of the decision to lift the land tax rate in the last budget. As well as changing the land tax threshold taxpayers will also have their land tax liability calculated on whichever is the lower – a current land valuation or a three year average on land valuations. This change is to ensure affected landowners do not experience steep increases in land tax due to rapidly rising land values.

Landsburys has developed a unique way to resolute objections with the Valuer General’s to help save your company potential thousands each year. The 2005/6 land tax assessments are currently being mailed out and there is a limited time to object once an assessment has been received.