Amendments to the Land Tax Act
2005 (Vic) and the Taxation Administration Act 1997
(Vic), both of which came into effect on 9 December 2009, have put
new responsibilities on land owners in relation to land tax.
The amendments to the Land Tax Act
2005 (Vic) essentially shift the burden of mistakes when
calculating land tax from the State Revenue Office
(SRO) to the landowner. The new obligation, if not
complied with, could result in substantial penalty taxes.
Under the new provisions, a person who
is served with a notice of assessment of land tax must notify the
SRO of any error or omission in the notice relating to:
- any land in Victoria owned by the person that is not included
in the notice;
- any land in Victoria owned by joint owners that is not
specified as being jointly owned in the notice; or
- any land which is incorrectly specified as being eligible for
an exemption.
Notice of the error or omission must be
given to the SRO within 60 days from the date the notice of
assessment was issued. Failure to notify the SRO within this
timeframe will constitute a "notification default".
The failure of a trustee to notify the
SRO when certain events occur will also amount to a "notification
default". Some of the events which require notifying the SRO
include:
- a person becoming a trustee of land in Victoria;
- a trustee of land acquiring further land as trustee;
- a trustee disposing of any land subject to the trust; or
- anything that results in a trust to which land is subject
becoming a different category of trust.
Where a notification default occurs,
the landowner is liable to pay an additional 25% of the amount of
tax that should have been assessed had the notification default not
occurred.
However, the SRO has the discretion to
increase the amount of penalty tax payable to 75% of the additional
tax if it is satisfied that the notification default was wholly or
partly a result of the landowner's intentional disregard of the
error.
Conversely, the SRO may determine that
no penalty tax is payable if it is satisfied that the landowner
took reasonable care to comply with the taxation laws, or the
default occurred solely because of circumstances beyond the
landowner's control.
The new notification defaults are
currently in the spotlight, not only because of their recent
addition to the land tax laws, but because land tax assessments for
2010 have been received by many taxpayers.
Taxpayers should examine their
portfolios of landholdings and their assessments to ensure all
details are correct.
For further information, please contact:
John Chamberlin, Lawyer
Phone (direct) +61 3 9608 2121
Email
j.chamberlin@cornwalls.com.au