All states and territories impose quarterly land tax on residential rental properties except the Northern Territory.

In the ACT, there is no land tax exempt lower threshold, meaning that you pay land tax from the first dollar of land value. There are few opportunities to minimise your exposure to this tax except at the beginning or end of a rental period – e.g. when your main residence becomes a rental property, or when your rental property becomes a main residence.

This is because land tax liability is based on the status of a property on the first day of each quarter, i.e. 1 July, 1 October, 1 Dec and 1 Mar. That means that if your property is rented until 4th July, you will be liable for land tax for the whole July-September quarter. A better plan would be to negotiate with the tenants for them to vacate prior to 30 June. Likewise, if you’re planning to rent out a property for the first time, consider delaying it until after the 1st of a quarter, so that you won’t be liable for land tax that quarter.  Each state has different rules regarding the date that land tax is levied from.

Talk to your accountant for further information.


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