Land Tax hits off-the-plan home buyers

Land Tax hits off-the-plan home buyers

Laws that were introduced to improve housing affordability have seen off-the-plan home buyers getting hit with bills for hundreds of dollars.

From 1 July 2018, empty properties in Canberra began to incur land tax. This change was implemented in an attempt to stop landlords sitting on vacant property.

So, what has changed?

Previously only properties that were rented out attracted land tax, whilst homes that were the owner’s principal residence were exempt. Land tax now applies to vacant properties which means that both buyers and developers are getting hit with these new charges.

These tax bills are usually in the vicinity of a few hundred dollars and have recently been applied to people whose certificate of occupancy has arrived before settlement, making them responsible for paying an entire quarter’s land tax.

There are calls for the government to introduce apportionment for land tax, and the ACT government has said they are monitoring the implementation of the changes.

Nexis will keep abreast of any changes. Feel free to get in touch to discuss how land tax may affect you.

Image Credit: Scott Webb on Unsplash

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