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Act 1992 No. 84
LAND TAX MANAGEMENT (AMENDMENT) BILL 1992
NEW SOUTH WALES
EXPLANATORY NOTE
(This Explanatory Note relates to this Bill as introduced into Parliament)
The object of this Bill is to make the following amendments to the Land Tax
Management Act 1956 ("LTM Act") with effect from and including the 1993 land tax
year (each amendment is described in greater detail below):
(a) to provide that the land values on which land tax is calculated are to be
ascertained by the Chief Commissioner on an annual basis;
(b) to extend the current land tax exemption conferred on some non-profit sports
clubs to all non-profit sports and games clubs;
(c) to extend the current land tax reduction for part of land used a a retirement
s
village or nursing home to the situation where part of a building is used for that
purpose (with effect from the commencement of the original reduction
provision);
(d) to widen the exemption applicable to parcels of residential land over 2,100
square metres that cannot be subdivided;
(e) to backdate to 31 December 1988 the commencement of provisions dealing
with the land tax liability of lessees and licensees from the Crown;
(f) to enable the Chief Commissioner to alter for land tax purposes an unfair or
unreasonable strata unit entitlement (in place of an existing provision
authorising the Chief Commissioner to apply to the Strata Titles Board for such
a reallocation);
(g) to enact consequential savings and transitional provisions and make a
miscellaneous statute law revision amendment,
Land values to be ascertained annually by Chief Commissioner
Currently the land values on which land tax is calculated are the Valuer-General's
valuations under the Valuation of Land Act 1916 ("VOL Act"). For land tax purposes,
those values are multiplied by an "equalisation factor" calculated by the Valuer-General
to ensure that those values reflect current values. However, land values for 1991 and
1992 have been frozen at 1990 levels.
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Land Tax Management (Amendment) 1992 [Act 1992 No. 84]
Under the amendments, the Chief Commissioner will ascertain land values on an
annual basis (as at 1 July each year) for the purpose of determining land tax liability as
at the end of that year. The system of equalisation factors will be discontinued.
The following are the important aspects of the new provisions:
The method of determining a land value will be the same as under the VOL Act.
Existing valuation concessions (such a apply to coal mines and dwelling houses
s
on valuable parcels) and allowances for profitable expenditure and
apportionment of value for mixed development land will remain.
There will be 3 new valuation concessions (see below).
There will be new administrative arrangements to facilitate the new valuation
scheme (such as a right to object and appeal against a land value, and a wider
power of delegation for the Chief Commissioner).
Certain provisions of the VOL Act will be carried over (such as the power to
enter premises for valuation purposes and protection from liability).
Many of the amendments in Schedule 1 have had to be made to accommodate the
new scheme and its new terminology. The opportunity has been taken to simplify the
language and structure of some of these provisions. A breakdown of the amendments
made by Schedule 1 is set out below.
Additional valuation concessions
The amendments provide 3 additional valuation concessions a follows:s
Section 59 extends the special valuation provisions of the Heritage Act 1977
(which currently apply to land subject to a permanent conservation order under
that Act) to land subject to an interim conservation order under that Act. The
land will be valued so as to reflect the effect of such an order on the land.
Section 60 requires land that is subject to heritage provisions under an
environmental planning instrument to be valued on the basis of certain
assumptions that are designed to recognise the restrictions on development
imposed by heritage provisions.
Section 61 requires land on which there are premises subject to a "fair rent"
restriction under the protected tenancy provisions of the Landlord and Tenant
(Amendment) Act 1948 to be valued taking into account the effect of that Act on
the rent that may be obtained for the premises.
Exemption for sports and games clubs
Currently a land tax exemption is conferred on some non-profit sports clubs. The
exemption is limited to athletic and exercise sports such as tennis, football and cricket.
The amendment will extend the exemption to all non-profit sports and games clubs (for
example, clubs for the playing of chess or bridge or for the pursuit of sports such a s
motor racing). [See Schedule 2(1) (a)]
Building partly used a retirement village or nursing home
s
Currently there is a land tax exemption for land used as a nursing home or retirement
village. Alternatively, if only part of the land is used for that purpose, there is a pro rata
reduction in land value based on the proportion of the land that is used for that purpose.
However the current provision does not enable that pro rata reduction to apply when the
partial land use is of part of a building. The amendment will enable the partial use of a
building to be taken into account in determining the pro rata reduction. The amendment
is backdated to the commencement of the original provision (31 December 1990). [See
Schedule 2 (3) and (9)]
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Land Tax Management (Amendment) 1992 [Act 1992 No. 84]
Land over 2,100 square metres that can't be subdivided
Existing land tax exemptions for owner-occupied residential land (s. 10 (1) (r)) and
new rental accommodation (s. 10H) generally do not apply if the land is over 2,100
square metres in area. The exemption is however available in certain cases if the land's
area is less than 2 hectares and its subdivision is prevented by a planning instrument
(s. 10 (1) (u)). Land over 2 hectares has the first $160,000 of value disregarded and a
further pro rata reduction in value for area over 2 hectares (s. 10 (5)). There is also
provision for the Hardship Board to waive land tax if subdivision of owner-occupied
residential land is prevented by circumstances beyond the owner's control (s. 50 (1D)).
There is also an existing reduction that applies to owner occupied flats on land up to
2,100 square metres.
The amendments will alter these provisions s that the existing exemptions and
o
reductions will be available without restriction a to area when subdivision is prevented
s
or likely to be prevented by a planning instrument, the Local Government Act 1919 or
other circumstances beyond the owner's control.
Liability of lessees/licensees of land owned by the Crown
Since 1988 there have been a series of amendments to provisions of the LTM Act
concerned with the liability of lessees and licensees of land owned by the Crown. The
latest amendments in 1991 (particularly the new section 21C) successfully clarified the
land tax position in this area. The amendment made by this Bill will backdate the
enactment of section 21C and its consequential amendments to 31 December 1988 (the
date on which the series of amendments commenced) in respect of land owned by the
Crown. [See Schedule 2 (5) and (9)]
Alteration of strata unit entitlement
An existing provision of the LTM Act (section 65A) allows the Chief commissioner
to apply to the Strata Titles Board for the reallocation of a strata (or leasehold strata)
unit entitlement if the original allocation was unreasonably made and land tax has been
avoided.
That provision is to be replaced with a provision that will enable the Chief
Commissioner to alter for land tax purposes a unit entitlement that the. Chief
Commissioner thinks is unfair or unreasonable. Such an alteration can operate
retrospectively but not before the 1989 tax year (which is the first year in which the
existing provision applied). A further amendment confers a right of objection in respect
of an alteration of unit entitlement under the new provision. [See Schedule 2 (6) and (8)]
Consequential amendments to other Acts
The Bill also makes consequential amendments to the following Acts:
Valuation of Land Act 1916
Strata Titles Act 1973
Strata Titles (Leasehold) Act 1986
Land and Environment Court Act 1979
Schedule 1--break-down of amendments
Items (l), (2) and (3) are consequential on the discontinuation of equalisation factors
(and the consequential redundancy of the concept of "adjusted value").
Item (4) re-enacts section 9A of the LTM Act to fit that section in with the new
valuation provisions. The concept "unutilised value allowance" replaces the existing
concept of "attributable part". Item (18) makes a consequential amendment.
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Land Tax Management (Amendment) I992 [Act I992 No. 84]
Item (5) removes the redundant concept of "adjusted value" from various provisions
and replaces it with "land value".
Item (6) makes an amendment to reflect the fact that apportionment factors for the
purposes of section 9C of the LTM Act will now be determined under the LTM Act
instead of the VOL Act.
Item (7) makes it clear that the Chief Commissioner's power to amend assessments
extends to amendments necessary to give effect to a correction to the relevant land
value.
Item (8) extends the current provision dealing with the evidentiary value of
particulars shown on assessments to include land values shown on assessments.
Items (9)-(17) amend provisions concerned with objections and appeals against
assessments (which currently do not apply to land valuations) s that an objection and
o
appeal can be made against a land value. This replaces the existing right of objection
under the VOL Act.
Item 19 substitutes Part 7 of the LTM Act. The new Part is divided into 5 Divisions,
as follows:
Division 1 (ss. 54-62A) requires land values for land tax purposes to be
ascertained by the Chief Commissioner (s. 55). Relevant provisions of the VOL
Act are applied (ss. 56,57). Existing section 54 (1A) of the LTM Act, which is a
special provision applying to the valuation of land in a colliery holding, is
re-enacted with appropriate changes and simplifications (s. 58). Sections 59-61
enact the additional valuation concessions described above applicable to land
subject to heritage and rent-control restrictions. Section 62 provides for the
deduction of an allowance for profitable expenditure determined under
Division 2.
Division 2 (ss. 62B-62H) re-enacts existing sections 54A and 54B of the LTM
Act, and sections 58 and 58A of the VOL Act.
Division 3 (ss. 621-62N) re-enacts existing section 9A of the LTM Act (dealing
with the postponement of land tax on land that is the site of a single dwelling
house and which is zoned to allow more valuable development).
Division 4 (ss. 62O-62T) re-enacts section 58A of the VOL Act, which deals
with the apportionment of land value on mixed use sites and is relevant to the
reduction of land value for flats on mixed use sites under section 9C of the LTM
Act.
Division 5 (ss. 62U-62ZA) contains miscellaneous provisions, including
provisions for the setting up of a Register of Land Values, delegations by the
Chief Commissioner, powers of entry for valuation purposes and protection from
liability.
Clause 1 specifies the short title of the proposed Act.
Clause 2 provides for the commencement of the proposed Act on 31 December
1992.
Clause 3 gives effect to the Schedules of amendments to the Land Tax Management
Act 1956 (Schedules 1 and 2).
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Land Tax Management (Amendment) 1992 [Act 1992 No. 84]
Clause 4 gives effect to the Schedule of consequential amendments to other Acts
(Schedule 3).
Schedules 1 and 2 make the amendments to the Land Tax Management Act 1956
described above.
Schedule 3 makes amendments to other Acts that are consequential on the
amendments made by Schedule 1 (the valuation of land amendments).