Averaging land values
From the 2007 tax year onwards, the taxable value of each parcel of land you own will generally be determined by adding the land value for the current tax year and the land values that applied for the two preceding tax years then calculating the average.
For example
2010 land value $560,000 (land value as at 1 July 2009)
2009 land value $450,000 (land value as at 1 July 2008)
2008 land value $400,000 (land value as at 1 July 2007)
Total = $1,410,000 divided by 3
Average land value = $470,000
Frequently asked questions
- Why was averaging introduced?
Averaging was introduced to help reduce large changes in land tax liabilities resulting from significant movements in annual land values. This means that there will be a more gradual change in land tax bills between years.
- Why has my land tax gone up even though my land value has gone down?
If the 3-year average value of your land has gone up compared to the 3-year average last year, your land tax will go up, even if your land value for the current year has gone down.
- How are land values averaged if there was no land value for a previous year?
If the land you own was part of a recent subdivision or amalgamation and did not exist for all three taxing dates, the average value will be calculated using the land values for the taxing dates when the property did exist.
- What if I am claiming a partial exemption or a deduction?
There is no change in how your exemption, allowance or deduction is calculated. Only the land value used will change; instead of using the current year’s land value, the land value used will be the average of the current tax year and the land values that applied for the two preceding tax years.
- How does averaging apply to company title units?
Land tax for company title units is calculated by averaging the land value for the full block for the last three years. Once this is determined, we use this value to determine the average value of the shareholding.
- How are heritage protected average land values calculated?
If your land is heritage protected, the average land value will be calculated using the heritage protected land values. If the heritage protection applies for less than three years, only the land values when the protection applied will be averaged.
- Will the land tax threshold be averaged like land values?
Yes, from the 2007 tax year onwards the threshold will be the average of 3 years - the current year and 2 prior years.
- Does this mean the land tax threshold may go down?
No. The average is compared to the previous year’s threshold and if it is lower the previous year’s threshold will be used.
