64 Jolimont Street, East Melbourne VIC 3002

Accounting News

Absentee Property Owner – Tax Whack - Victoria

The State of Victoria State Revenue Office (SRO) coffers must be bulging from land tax imposed on absentee owners.

This tax could mean expenses excluding interest exceed any rental income    

As a simple illustration for land with a site value of $3m normal land tax would be $24,975 p.a. but if the owner is non-resident, tax is $84,975 p.a.

An absentee individual is any individual who:-

  • is not an Australian citizen or permanent resident
  • does not ordinarily reside in Australia, and
  • was absent from Australia
    • on 31 December of the year prior to the tax year, or
    • for more than six months in total in the calendar year prior to the tax year.

An absentee corporation is a corporation:

  • that is incorporated outside Australia, or
  • in which an absentee person(s) has a controlling interest.

An absentee trust can have at least one beneficiary who is an absentee person.

This tax could mean expenses excluding interest exceed any rental income – great care is needed if potentially relevant. And the obligation is on the owner to advise SRO of their absentee status.

 

 

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W Marshall & Associates 64 Jolimont Street, East Melbourne VIC 3002

Important: This is not advice. Clients should not act solely on the basis of the material contained in this Commentary. Items herein are general comments only and do not constitute or convey advice per se. Also changes in legislation may occur quickly. We therefore recommend that our formal advice be sought before taking any action. The Commentary is issued as a helpful guide to clients and for their private information. Therefore it should be regarded as confidential and not be made available to any person without our prior approval.