This Commissioner’s practice explains when the Commissioner will raise a retrospective land tax assessment on newly subdivided land which was previously exempt.
The Land Tax Assessment Act 2002 (LTA Act) provides exemptions from land tax for land that is private residential property, used in a primary production business, or used for a dwelling or residential park. If that land is subdivided and certain conditions are met, the taxable portion of the land is retrospectively assessed for up to five or ten previous years.
Land tax is payable by the owner at the time of subdivision, even if a different owner benefited from the exemption then sold the land to the current owner.
Each year is assessed using the rates that applied in that year as if the taxable land were the only land of the subdividing owner. The amount will be reduced by any land tax already paid on the taxable portion of the land for any of those years.
This Commissioner's practice replaces the now archived CP LT 2 'Newly Subdivided Residential Property' and CP LT 3 'Newly Subdivided Rural Business Land'.
