The period for which unoccupied land in New South Wales may be treated as a person’s principal place of residence for land tax purposes has been extended.
The Revenue Legislation Amendment Act 2023 (NSW) commenced on 1 July 2023. The Act permits the Chief Commissioner of Taxation to extend from four tax years to six tax years the maximum period during which unoccupied land may deemed a person’s principal place of residence.
The Chief Commissioner’s discretion is enlivened if they are satisfied that delays in completing building or other work has rendered the land uninhabitable. Any such delays must also have been due to circumstances outside the control of the property owner that they could not have reasonably avoided.
The Act is intended to ensure that owners who faced building and construction delays due to the exceptional circumstances during the COVID-19 pandemic, or the recent bushfires and floods, will not be penalised by being required to pay land tax on their still unoccupied land. Any four-tax year period that ended on or after 31 December 2019 may be extended to six years, at the Chief Commissioner’s discretion. Any property owner granted an extension will have up to six tax years in total to complete their building or renovation work, and to occupy the property as a principal place of residence, before land tax is charged.
The By Lawyers New South Wales conveyancing publications have been updated accordingly. The Purchase of Real Property (NSW), Sale of Real Property (NSW), and 1001 Conveyancing Answers (NSW) guides include extensive sections of commentary on land tax and land tax exemptions.