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If you own land with others, you are a joint owner. We assess joint owners for land tax in two stages:

  1. Joint ownership assessment - we assess all of the joint owners together, on all of their jointly owned land as though they were one person.
  2. Individual assessment - we assess each owner individually on all the taxable lands they own in any capacity, including their interest in any jointly owned land.

If you are assessed for tax on the jointly owned land under a joint ownership assessment, we apply a deduction to your individual assessment. Your deduction is the lesser of either:

  • Your share of the tax in the joint ownership assessment (Deduction 1).
  • The amount of tax calculated in your individual assessment for your share in the jointly owned land (Deduction 2).

Land tax and joint owners

Calculating the joint ownership deduction

Your deduction is essentially the lesser of the proportional amount of tax that the jointly owned land represents for you in either the joint ownership assessment (Deduction 1) or your individual assessment (Deduction 2).

Your deduction is the lesser of:

  • Deduction 1 - your share of the tax in the joint ownership assessment (A x B), or
  • Deduction 2 - the amount of tax which the jointly owned land represents in your total liability (C ÷ D x E)

Where:

  • A is the proportion (percentage) of the taxpayer’s share of the jointly owned land.
  • B is the land tax on the jointly owned land ($).
  • C is the taxpayer’s share of the jointly owned land ($).
  • D is the taxpayer’s total land holdings ($).
  • E is the land tax on the taxpayer’s total land holdings ($).

When Deduction 1 applies

Deduction 1 is your share of the tax in your joint ownership assessment. Generally, you get Deduction 1 when the total value of all the taxable land you own individually is greater than the total value of the joint ownership’s taxable land.

For example, you individually own taxable land worth $800,000 and the joint ownership of which you are a member owns taxable land worth $400,000.

Deduction 1 example

When Deduction 2 applies

Deduction 2 is the amount of tax which the jointly owned land(s) represents in your total individual tax liability. Generally, you get Deduction 2 when the total value of all the taxable land you own individually is less than the total value of all the joint ownership’s taxable land.

For example, individually you own taxable land worth $400,000 and your joint ownership owns taxable land worth $800,000.

Deduction 2 example

Why the lesser deduction?

Land tax is assessed on the total value of your taxable land, with tax rates progressively increasing as land values rise.

This means that if there is a difference in the total value of the taxable land owned by the joint ownership and by you individually, there will be a difference in both the:

  • tax applying to the jointly owned land under each of the assessments,
  • values of Deduction 1 and Deduction 2.

You get the lesser of Deduction 1 or Deduction 2 because there are times when the greater deduction would be larger than your liability under your individual assessment and the deduction cannot offset any of your liability for any other property you own individually or under other arrangements.

In general, because of the way land tax is calculated on jointly owned land, you pay more tax overall if you are a joint owner of land.

Lesser deduction example

Below are examples of when Deduction 1 and Deduction 2 apply, and why you receive the lesser deduction.

Example 1: Joint ownership deduction

  • At midnight on 31 December of the preceding tax year, Mr Wood and Ms Lee each own 50% of Property A, an investment property with a taxable value of $280,000.
  • Ms Lee also owns one other property in her own name, Property B, an investment property with a taxable value of $200,000.
  • Mr Wood and Ms Lee, as the joint owners of Property A, will be assessed together in the joint ownership assessment.
  • Ms Lee will be assessed separately as both an owner of Property A and owner of other land (Property B).

Joint ownership assessment 

Mr Wood and Ms Lee’s joint ownership liability is calculated using the total taxable value of their non-exempt land and applying the appropriate rate of land tax:

  • The taxable value of the jointly owned land (Property A) is $280,000.
  • The general land tax rate for land holdings valued between $250,000 and less than $600,000 is $275 + 0.2% of the amount greater than $250,000. 
  • Accordingly, the land tax payable is $335, being $275 + (($280,000 - $250,000) x 0.2%).
  • Mr Wood and Ms Lee both share liability for this amount.

Individual assessment of Mr Wood

As Mr Wood only owns Property A, the deduction is equal to his individual tax liability and so no tax is payable.

As such, we do not issue him with an individual assessment and he only has to pay the joint ownership assessment.

Individual assessment of Ms Lee

As Ms Lee owns other property, she receives an individual assessment that includes all the taxable land she owns, including the jointly owned land.

There are three steps to calculating Ms Lee’s land tax liability:

Step 1: Calculating Ms Lee’s tax liability before the joint ownership deduction

  • Calculate the total taxable value of Ms Lee’s land holdings
    • Ms Lee’s individual land holding (Property B) is valued at $200,000. 
    • The value of Ms Lee’s joint ownership land holdings is $140,000, being 50% of $280,000.
    • Accordingly, the total value of Ms Lee’s land holdings is $340,000 ($200,000 + $140,000). 
  • Calculate the tax payable on Ms Lee’s total landholdings
    • The general land tax rate for land holdings valued between $250,000 and less than $600,000 is $275 + 0.2% of the amount greater than $250,000. 
    • The land tax payable by Ms Lee before the joint ownership deduction is $455, being $275+ (($340,000 - $250,000) x 0.2%).

Step 2: Calculating the joint ownership deduction

  • Ms Lee is entitled to a joint ownership deduction in her individual assessment. The deduction is the lesser of:
    • 50% (proportion of Ms Lee’s share in the jointly owned land) x $335 (total amount of land tax assessed on the joint ownership assessment) = $167.50, or
    • $140,000 (the value of Ms Lee’s share in the jointly owned land) divided by $340,000 (Ms Lee’s total land holdings) x $455 (tax on Ms Lee's total taxable land holdings) = $187.35
  • Therefore, Ms Lee is entitled to a joint ownership deduction of $167.50.

Step 3: Calculating Ms Lee’s tax liability after the deduction

  • By subtracting the lesser amount of $167.50 from Ms Lee’s total land tax liability ($455), we find that the land tax payable by Ms Lee as an individual is $287.50 (i.e. $455 - $167.50).
  • Ms Lee is still also liable to pay the joint ownership assessment.

Example 2: Joint ownership deduction

  • At midnight on 31 December of the preceding tax year, Mr Wood and Ms Lee each own 50% of Property A, an investment property with a taxable value of $500,000.
  • Ms Lee also owns one other property in her own name, Property B, an investment property with a taxable value of $200,000.
  • Mr Wood and Ms Lee, as the joint owners of Property A, will be assessed together in the joint ownership assessment.
  • Ms Lee will be assessed separately as both an owner of Property A and an owner of other land (Property B).

Joint ownership assessment 

Mr Wood and Ms Lee’s joint ownership liability is determined using the total taxable value of their non-exempt land and applying the appropriate rate of land tax:

  • The taxable value of the jointly owned land (Property A) is $500,000.
  • The general land tax rate for land holdings valued between $250,000 and less than $600,000 is $275 + 0.2% of the amount greater than $250,000. 
  • Accordingly, the land tax payable is $775, being $275 + (($500,000 - $250,000) x 0.2%).
  • Mr Wood and Ms Lee both share liability for this amount.

Individual assessment of Mr Wood

As Mr Wood does not own any other taxable lands, other than Property A, the deduction is equal to his individual tax liability and so no tax is payable.

As such, we do not issue him with an individual assessment and he only has to pay the joint ownership assessment.

Individual assessment of Ms Lee

As Ms Lee owns other property, she receives an individual assessment that includes all the taxable land she owns, including the jointly owned land. There are three steps to calculating Ms Lee’s land tax liability:

Step 1: Calculating Ms Lee’s tax liability before the joint ownership deduction

  • Calculate the total taxable value of Ms Lee’s land holdings
    • Ms Lee’s individual land holding, being Property B is valued at $200,000. 
    • The value of Ms Lee’s joint ownership land holdings is $250,000, being 50% of $500,000.
    • Accordingly, the total value of Ms Lee’s land holdings is $450,000 ($200,000 + $250,000). 
  • Calculate the tax payable on Ms Lee’s total landholdings
    • The general land tax rate for land holdings valued between $250,000 and less than $600,000 is $275 + 0.2% of the amount greater than $250,000. 
    • The land tax payable by Ms Lee before the joint ownership deduction is $675, being $275+ (($450,000 - $250,000) x 0.2%).

Step 2: Calculating the joint ownership deduction

  • Ms Lee is entitled to a joint ownership deduction in her individual assessment. The deduction is the lesser of:
    • 50% (proportion of Ms Lee’s share in the jointly owned land) x $775 (total amount of land tax assessed on the joint ownership assessment) = $387.50, or
    • $250,000 (the value of Ms Lee’s share in the jointly owned land) divided by $450,000 (Ms Lee’s total land holdings) x $675 (tax on Ms Lee's total taxable land holdings) = $375.
  • Therefore, Ms Lee is entitled to a joint ownership deduction of $375.

Step 3: Calculating Ms Lee’s tax liability after the deduction

By subtracting the lesser amount of $375 from Ms Lee’s total land tax liability ($675), we find that the land tax payable by Ms Lee as an individual is $300 (i.e. $675 - $375).

Ms Lee is still also liable to pay the joint ownership assessment.

Example 3: Why the lesser deduction applies

At midnight on 31 December of the preceding tax year, Mr Wood and Ms Lee each own 50% of Property A, an investment property with a taxable value of $1,200,000.

Ms Lee also owns one other property in her own name, Property B, an investment property with a taxable value of $250,000.

Joint ownership assessment 

Mr Wood and Ms Lee’s joint ownership liability is calculated using the total taxable value of their non-exempt land and applying the appropriate rate of land tax:

  • The taxable value of the jointly owned land (Property A) is $1,200,000.
  • The general land tax rate for land holdings valued between $1,000,000 and less than $1,800,000 is $2975 + 0.8% of the amount greater than $1,000,000. 
  • Accordingly, the land tax payable is $4575, being $2975 + (($1,200,000 - $1,000,000) x 0.8%).
  • Mr Wood and Ms Lee both share liability for this amount.

Individual assessment of Mr Wood

As Mr Wood does not own any other taxable lands, other than Property A, the deduction is equal to his individual tax liability and therefore no tax is payable.

As such, we do not issue him with an individual assessment and he only has to pay the joint ownership assessment.

Individual assessment of Ms Lee

As Ms Lee owns other property, she receives an individual assessment that includes all of the taxable land she owns, including the jointly owned land.

Step 1: Calculating Ms Lee’s tax liability before the joint ownership deduction

  • Calculate the total taxable value of Ms Lee’s land holdings.
    • Ms Lee’s individual land holding (Property B) is valued at $250,000. 
    • The value of Ms Lee’s joint ownership land holdings is $600,000, being 50% of $1,200,000.
    • Accordingly, the total value of Ms Lee’s land holdings is $850,000 ($250,000 + $600,000). 
  • Calculate the tax payable on Ms Lee’s total landholdings
    • The general land tax rate for land holdings valued between $600,000 and less than $1,000,000 is $975 + 0.5% of the amount greater than $600,000. 
    • Accordingly, the land tax payable for land valued at $850,000 is $2225, being $975 + (($850,000 - $600,000) x 0.5%).

Step 2: Calculating the joint ownership deduction

  • Ms Lee is entitled to a joint ownership deduction in her individual assessment. The deduction is the lesser of:
    • 50% (proportion of Ms Lee’s share in the jointly owned land) x $4575 (total amount of land tax assessed on the joint ownership assessment) = $2287.50, or
    • $600,000 (the value of Ms Lee’s share in the jointly owned land) divided by $850,000 (Ms Lee’s total land holdings) x $2225 (tax on Ms Lee's total taxable land holdings) = $1570.59.
  • If Deduction 1 (i.e. 50% of the total amount of land tax assessed on the joint ownership assessment) is applied to Ms Lee's individual assessment, the deduction would be $2287.50. This would result in a credit of $62.50 ($2225 - $2287.50). It would mean that Ms Lee would receive a refund and her individual liability for Property B would be completely offset by her interest in Property A.
  • Therefore, the joint ownership deduction in this case is Deduction 2 (i.e. $600,000 divided by $850,000 x $2225 = $1570.59).

Step 3: Calculating Ms Lee’s tax liability after the deduction

  • By subtracting the lesser amount of $1570.59 from Ms Lee’s total land tax liability ($2225), the land tax payable by Ms Lee as an individual is $654.41 (i.e. $2225 - $1570.59).
  • Ms Lee is still also liable to pay the joint ownership assessment with Mr Wood.
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