Land Tax in Australia Land Tax in Australia defines how land tax operates and is administered across state and local government in Australia International expert Vince Mangioni reviews the current status and emerging trends in these taxes in Australia and compares them with the UK, USA, Canada, Denmark and New Zealand Using substantial original research, the author sets out what Australia must do through practice and policy to reform and bring this tax into the twentyfirst century The need for fiscal reform and strengthening the finances of Australia’s sub-national government is long overdue and is key in reforming Australia’s federation These reforms aim to minimise the taxpayer revolts encountered in previous attempts at land tax reform, while improving tax effort in line with other advanced OECD countries This book provides an essential resource for all property professionals working in development, valuation, law, investment, as well as accountants, tax economists and government administrators It is highly recommended for students studying property, taxation, legal and social science courses Vince Mangioni is Associate Professor at the University of Technology Sydney, Australia He is an internationally recognised expert on recurrent land and property taxation and frequently speaks at international conferences and industry workshops on this subject “Recurrent property taxes are a very important source of revenue used to support the provision of local services in many countries around the world However, they are often unpopular and can be controversial Part of the reason for their unpopularity is that they often lack transparency and are frequently misunderstood both by those who are called upon to pay the tax and by the politicians who are responsible for the property tax system At the present time, land tax in Australia is very much in the headlines and the subject of debate both locally and nationally; there is considerable pressure for reform of land tax, but there is also significant resistance I am very pleased therefore that Vince Mangioni has written this book to assist in clarifying the key issues and providing international case studies that will assist policy-makers and the public in understanding and modernising the current land tax system in Australia.” – Paul Sanderson JP LLB (Hons) FRICS FIRRV, President, International Property Tax Institute Land Tax in Australia Fiscal reform of sub-national government Vince Mangioni First published 2016 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN and by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2016 Vincent Mangioni The right of Vincent Mangioni to be identified as author of this work has been asserted by him in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988 All rights reserved No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers Trademark notice : Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging-in-Publication Data Mangioni, Vincent, author Land tax in Australia : fiscal reform of sub-national government / Vincent Mangioni   pages cm  Includes bibliographical references and index  1. Land value taxation—Law and legislation—Australia. 2. Real property tax—Law and legislation—Australia. 3. Real property and taxation—Australia. I. Title  KU2830.L36M36 2016  336.220994—dc23  2015023187 ISBN: 978-1-138-83125-4 (hbk) ISBN: 978-1-315-73666-2 (ebk) Typeset in Baskerville by Apex CoVantage, LLC Contents List of tables List of figures Acknowledgements About the author Overview Book structure Terms and acronyms Part 1 Status quo and the evolving challenge  1 Advance Australia fair Introduction Structure of government and evolution of Australia’s tax system Inquiries into tax reform and government expenditure Tax reforms of the late 20th and early 21st centuries Taxation design and economic reform Summary  2 Evolution economics and status quo of taxing land Introduction Economics of taxing land and the urban challenge Land tax: from settlement to the present in Australia Land tax revenue trends and principles of good tax design Summary Part 2 Land tax assessment and administration in Australia  3 Definitions and bases of value Definitions of value Bases of value Australian bases of value Summary  4 Valuation of land and assessment of land tax Introduction Research method and rationale Research method – simulations Residential simulation Retail simulation Residential/retail comparison Summary  5 Principal place of residence Introduction Data matching or reform The need for fiscal reform New South Wales – defining the principal place of residence Queensland – defining the principal place of residence Victoria – defining the principal place of residence South Australia – defining the principal place of residence Tasmania – defining the principal place of residence Western Australia – defining the principal place of residence  6 Business use, investment and development land Introduction New South Wales (NSW) Queensland Victoria South Australia Tasmania Western Australia Northern Territory Australian Capital Territory  7 Objections, appeals and enforcement Introduction New South Wales land values – objections and appeals Victoria Queensland South Australia Tasmania Western Australia Northern Territory Australian Capital Territory (ACT) Summary Part 3 Recurrent land taxation – international case studies  8 United States and Canada Overview United States Summary Canada  9 United Kingdom – England and Ireland Overview England Ireland Summary 10 Denmark Reform of sub-national government An evolving finance path and equalisation system Role of land and property taxation Current land and property taxation Operation of land and property value tax 2001/02 to 2014 Tax freeze for property value tax Ceiling on buying and selling property Limiting property value tax rises from year to year Strengths of the land and property tax system Challenges of the land and property tax system Options for reform in 2015/16 and beyond Summary 11 New Zealand Overview New Zealand’s tax system and tax mix Local government Land and property taxation Bases of value Objections to valuations Summary Part 4 Reforming land value taxation and fiscal reform of sub-national government in Australia 12 Reforming recurrent land tax under the status quo What is land tax in a modern Australian tax system? Land tax reform under the status quo Bases of assessing land taxes The emerging value and rating phenomenon Summary 13 Realigning Australia’s tax system Introduction Property tax reform and housing mobility Recurrent land tax reform A modern Australian tax framework: top-down and bottom-up reform Which tier of government should levy recurrent land tax? Conclusion Where to go from here References Index Tables 1.1 Ranking as a percentage of tax to GDP 2010 1.2 Percentage share of taxation revenue by sphere of government over past two decades 1.3 Tax collected by central government 1.4 Income tax rates and threshold comparison 2.1 Evolution and structure of government and property tax 2.2 Concessions for pensioners and first homebuyers 2.3 Local rates and state land tax as a percentage of total revenue, 2008–09 2.4 Global trends in land tax revenues 2.5 Recurrent land tax expenditure 2013 2.6 Change in land tax revenue as percentage of local government rate revenue 2001–2012 3.1 Bases of value by level of government 3.2 Bases of value across Australia 3.3 Value v evidence of value 3.4 Valuation frequency and provider 4.1 Simulation and survey response rate 4.2 Participant representativeness of completed responses 4.3 Residential land simulation summary 4.4 10 Fiction Street – change in standard deviation 4.5 10 Fiction Street – change in mean value 4.6 15 Fiction Street – change in standard deviation 4.7 15 Fiction Street – change in mean value 4.8 20 Fiction Street – change in standard deviation 4.9 20 Fiction Street – change in mean value 4.10 Sales analysis and land value summary 4.11 Standard deviation comparative analysis 4.12 Retail land simulation summary 4.13 15 Main Street – change in standard deviation as percentage of mean values 4.14 15 Main Street – percentage change in mean value 4.15 5 Bank Road – change in standard deviation as a percentage of mean values 4.16 5 Bank Road – change in mean value 4.17 20 Main Street – change in standard deviation as percentage of mean values 4.18 20 Main Street – change in mean value estimated annual value, definition 68 evolution economics 21 excess burdens, imposition (minimization) 36 executor residence ownership, exemption (Section 22) 136 fair share 36 Federated Australia, outcome 326 federated structure (government) 337 fee simple land, impediments 65 finance, term (usage) 309 Financial Assistance Grants (FAGs), introduction 331, 340 Fire and Emergency Services Act (2005) 172 fire service levy (Victoria) 35 first homebuyers, concessions 29 , 329 First Home Owners Grants (FOHG), introduction 31–2 fiscal arrangements, evolution 7 fiscal policy, usage 37 fiscal reform: necessity 110–12; reform 303 focus group composition 307 forced sale value (liquidation value) 55 four unities rule (unity of title rule) 113–16 Fraser, Malcolm: government, impact 30, 331; opposition 15 Freehold Development Act (1973) 116 funding, term (usage) 309 Gas Supply Act (1996) 150 George, Henry 23 Global Financial Crisis 3, 303 globalization, increase 11–12 going concern value 55 Gollan v Randwick Municipal Council 65 Good Government, principles 13 goods and services tax (GST) 3; introduction (2000) 31, 59, 310; lodgement 183; rate, increase 293; revenue allocation 14 Goods and Services Tax, absence 326–7 good tax design, principles 36 government: expenditures, inquiries 10–14; federated structure 337; national/sub-national structure, advancement 10–11; structure 4–10; taxation, evolution/structure 27; unitary structure 336–7 Government Business Enterprises Act (1995) 176 Grants Commission Act (1973) 30 Gross Domestic Product (GDP) per capita, impact 18 gross domestic product (GDP), tax percentage (ranking) 4 gross rental value (GRV), local government rate determination 71 Gross Rental Value (GRV), usage 62–3 growth objectives, fiscal policy (usage) 37 hardship grounds 276 Hardship Review Board 198; constitution (Section 106A) 197 Health Services Act (1997) 148 Henry Review 12 High Court, income tax ruling 6 Higher Education Contribution Scheme (HECS) 43 homeownership, factors 107 housing: capital gains, income tax (reluctance) 339; mobility 327–9 Hydro-Electric Corporation Act (1995) 176 improvements: assessment, difficulties 22–3; mean added value, examples 85, 92, 96; productivity, valuer identification 101–2 incidental business purposes, land use (concessions) 117 income: net wealth, relativity 42; threshold 276 income tax: Commonwealth laws, breach 109; Commonwealth/state collection 6; levy 5; lodgement 183; rates, threshold comparison 17 Income Tax Assessment Act (1997) 174 Independent Pricing and Regulatory Tribunal (IPART): NSW state tax review 37; responsibility 340–1 Industrial Relations Act (1988) 148 insurable value 55 investment: business use/development land, relationship 143; owner-occupied property 143; rental property 143 Ireland 267, 273–8; appeals/reviews 276; deferrals 276; exemptions 275–6; liable parties 273–6; local property tax (LPT) 273; property value 275; Residential Property Price Register 274; self-assessment framework 274; unsold residential property 275–6; value bands/tax 274–5; value/valuations 274–5 labor, tax mix 9 land: demand/supply curve 26; development land, business use/investment (relationship) 143; estimated annual value, definition 68; home use: Section 37, land (home use) 122–3; Section 38, land (home use/demolition/renovations) 123; land to improved value, indicative percentage 317; net annual value, definition 68; occupation, unfit status (exemption continuation) 130; principal residence land (Section 6) 134–5; profitable expenditure, allowances 155; rent 138; taxable value, apportionment (partial home exemption) 126–7; unoccupied land, concession 118; use: incidental business purposes, concession 117; non-exempt purpose decision 126; patterns, examination 24 Land and Environment Court Act (1979) 192 Land and Income Taxation Act (1910) 175 Land Court decision (Queensland) 213 land tax (taxation): bases 61; calculation 50–51; collection/reallocation model 338; commencement (Australia) 27; comparison 36; concept, founding 22–3; Denmark 282–3; determination 339–40; economics 24–6; evolution, PPR (relationship) 113; example 49–53; exemption, Section 5(10) (South Australia) 132–4; history 26–32; land exemptions (New South Wales) 148–51; principles 37; rates, payment 53; recurrent expenditures 35; recurrent land taxation 241; reform 339–6; economic/operational efficiency, improvement 346; status quo 310–12; revenues: change, local government rate revenue percentage 40; global trends 33; Section 10, imposition 139; states, reintroduction 28; status quo 21; system: changes 344–5; transitional reform framework 345; total revenue percentage 29; trends 33–43; value-based system, development 21; years (New South Wales) 145–8 Land Tax Act (1878) 296 Land Tax Act (1915) 121–2; Section 36(2) 123 Land Tax Act (1936) 132, 169 Land Tax Act (2000) 173 Land Tax Act (2004): land tax, Section 9 exemption 139–40; land tax section 10 imposition 139 Land Tax Act (2005) 127, 163, 205 Land Tax Act (2010) 161 land tax assessment 73; analysis techniques, explanation 77; bases 312–16; comparative observation 81–3; completed responses, participant representativeness 76; data presentation 77; example (5 Bank Road): mean value, change 95; standard deviation, change 95; example (5 Bank Street) 94–5; comparative observation 94–5; improvements, initial/revised mean/standard deviation comparison 95; land, initial/revised mean/standard deviation comparison 95; example (10 Fiction Street) 81–3; improvements, initial/revised simulation mean comparison 82; land, initial/revised simulation mean comparison 82; mean value, change 82; standard deviation, change 82; example (15 Fiction Street) 83–4; improvements, initial/revised simulation mean comparison 84; land, initial/revised simulation mean comparison 84; mean value, change 83; standard deviation, change 83; example (15 Main Street) 92–4; comparative observation 94; improvements, initial/revised simulation mean comparison 93; land, initial/revised simulation mean comparison 93; mean value, percentage change 93; standard deviation, change 93; example (20 Fiction Street) 85–6; comparative observation 85–6; improvements, initial/revised simulation mean comparison 86; land, initial/revised simulation mean comparison 86; mean value, change 85; standard deviation, change 85; example (20 Main Street) 96–7; comparative observation 96–7; improvements, initial/revised mean/standard deviation comparison 97; land, initial/revised mean/standard deviation comparison 96; mean value, change 97; standard deviation, change 97; illustration 49–50; initial residential simulation results 79; initial simulation results 91; land value, summary 88; location value, ranking 100; research method/rationale 74–5; research method, simulations 75–8; residential land simulation, summary 79; residential/retail comparison 101–2; residential/retail standard deviation comparison 102; residential simulation 78–90; result 80; summary 86–90; respondents, representativeness 76–7; retail land simulation summary 91; retail sales analysis summary 98; retail simulation 90–101; summary 97–101; sales analysis, summary 88; simulation 75; analyses 77–8; response rate 75–6; results, revision 92; standard deviation: comparative analysis 90; comparison, summary 100; survey response rate 75; value, bases 319–22 Land Tax Assessment Act (2002) 176 Land Tax Management Act (LTMA) (1956) 116–18, 145, 152; division 3, unutilized value allowance 153–5; Section 10AA 151 Land Tax Management Acts, concessions/allowances 57 Land Tax Rating Act (2000) 173 land valuation 73; analysis techniques, data/explanation presentation 77; completed responses, participant representativeness 76; determination, starting point 25; examples 81–4, 92–7; research method/rationale 74–5; research method, simulations 75–8; residential land simulation, summary 79; residential/retail comparison 101–2; residential simulation 78–90; initial results 79; result, revision 80; summary 86–90; residential standard deviation, retail standard deviation (comparison) 102; respondents, representativeness 76–7; retail land simulation summary 91; retail simulation 90–101; simulation: initial results 91; results, revision 92; simulation analyses 77–8; simulation response rate 75 , 75–6; survey response rate 75 Land Valuation Act (1971) 220 Land Valuation Act (2010) 69, 161, 208, 210 Land Value (LV) 70; statutory meaning 65; term, introduction 63–4 land value (LV) 58; defining 49–50; evolution 64; example 49–50; taxation, reform (Australia) 303; test, judgment 54 Leasehold Development Act (1986) 116 liquidation value (forced sale value) 55 Local Government Act (1989) 141, 168 Local Government Act (1993) 140, 141, 153, 161, 175, 221, 222, 314 Local Government Act (1995) 141, 227 Local Government Act (1999) 70; Section 147 171 Local Government Act (2008) 179 Local Government (Highways) Act (1982) 176 Local Government (Personal Income Tax Sharing) Act (1976) 30, 330 Local Government (Rating) Act (2002) 297 Local Government Acts, concessions/allowances 57 local government, commonwealth funding 332 Local Government Cost Index (LGCI) 34 Local Government Finance Act (1992) 271 local government rates: components 48–9; concessions 140–1; determination 71; increases, restrictions 141–2; revenue, percentage 40 local government rating: application methods (NSW) 316; exemptions/concessions 140; state land tax rating, comparison 311 Local Govt Finance Act (1988) 271 local property tax (LPT) 273 local rates: payment, summary 53; total revenue percentage 29 lock-in effect, impact 38 look-through provisions 145 Los Angeles (CA) 249–54; Appeals Board, impact 254; assessments 252–3; basis 252; concessions/allowances 251–2; construction, assessment trigger 253; exemptions 252; objections/reviews 253–4; ownership change, reassessment 251; Proposition 8 252; Proposition 13 250, 331; tax reform 250–1; Proposition 58 252; Proposition 193 252; reassessments 252–3 LVHBU 320–1 Manufactured Homes (Residential Parks) Act (2003) 159 Maraya Holdings Pty Ltd v Chief Commissioner of State Revenue 152–3 Marine and Safety Authority Act (1997) 176 Marketing of Primary Products Act (1983) 148 market value 54; API definition 54–5 Maximum Permissible Assessment (MPA) 247; provisions 331 McNally and Anor v Commissioner of State Revenue 120 Meade Inquiry 10 Medicare Levy 43 Melbourne City Council, NAV usage 67–8 Mental Health Act (1990) 149 merged improvements 71 Mill, John 23 Mineral Resources Rent Tax (MRRT) 15, 303–4 Mining Act (1971) 172 Mining Act (1978) 178 mixed use land, apportionment factors 155 Municipal Property Assessment Corporation (MPAC) 264 National Commission of Audit 13–14; Commonwealth/state activity analysis 13; recommendations 13–14; revenue allocation 14 National Non-Domestic Rate (NNDR) 267 natural resources, rent 138 Nature Conservation Act (2002) 175 net annual value (NAV): definition 68; usage 67–8 new principal residence, purchase (Section 59) 130 New South Wales (NSW): Anzac House 150; appeals 184–98; council rates: calculation 51; objections/appeals 192–3; council rating 120–1, 156–7; Section 554 156; Section 585, rate postponement application 156; Section 592, postponed rates (interest) 156; Section 595, rates (writing off) 157; Section 596, circumstances (change) 157; Section 601, hardship (valuation changes impact) 157; eligible pensioner, definition 120; environment court 192; Hardship Review Board 198; incidental business purposes, land use (concessions) 117; Independent Pricing and Regulatory Tribunal (IPART), responsibility 340–1; interest (Part 5) 193–4; local government rating: application methods 316; exemptions/concessions 140; Maraya Holdings Pty Ltd v Chief Commissioner of State Revenue 152–3; objections 184–98; sales evidence 189; subject property 188–9; Office of State Revenue (OSR), look-through provisions 145; Ombudsman findings (2005) 318–19; Part 10, objections/reviews 195–8; primary production land 151–2; concessions/allowances 153; exemption, parts 151; Section 10AA, primary production land use exemption 151–2; rateable land 192; residence, absence (concession) 118–19; revenue, raising (example) 317; sales evidence: presence 191–2; request, points 191; unity of title rule (four unities rule) 113–16; impact 113; Valuation Objection Form, usage 185, 187; value, bases 63–6; Valuer-General, land value basis 184–5 New South Wales (NSW) acts: Aboriginal Land Rights Act (1983) 149; Administrative Decisions Review Act (1997) 195–6; Agricultural Industry Services Act (1998) 148; Children (Education and Care Services) Supplementary Provisions Act (2011) 151; Civil Administrative Tribunal Act (2013) 196; Community Land Development Act (1989) 150; Conveyancing Act (1919) 154; Co-operatives Act (1992) 150; Crown Lands Act (1989) 193; Education Act (1990) 149; Electricity Supply Act (1995) 150; Energy Services Corporations Act (1995) 150; Environmental Planning and Assessment Act (1979) 152; Freehold Development Act (1973) 116; Gas Supply Act (1996) 150; Health Services Act (1997) 148; Industrial Relations Act (1988) 149; Land and Environment Court Act (1979) 192; Land Tax Management Act (LTMA) (1956) 116–17, 145, 152; Section 10AA 151; Leasehold Development Act (1986) 116; Local Government Act (1993) 141, 153, 314; Marketing of Primary Products Act (1983) 148; Mental Health Act (1990) 149; Premium Property Tax Act (1998) 112; Private Health Facilities Act (2007) 149; State Owned Corporations Act (1989) 150; Supreme Court Act (1970) 197; Taxation Administration Act (1996) 193; Threatened Species Conservation Act (1995) 150; Valuation of Land Act (1916) 155–6, 185, 186; Section 14L, land profitable expenditure (allowances) 155; Section 33 189; Section 35 189; Sections 14S/14w 156; Sections 14X/14BBA, mixed use land (apportionment factors) 155 New South Wales (NSW) land: area threshold, removal 112; court 192; improvements 155; Land and Environment Court: challenge 191; objection, process 188; value: evolution 64; high level 187; low level 187–8; objections 187–8; objections, basis/evidence (absence) 190; objections, grounds 186–92; objections, procedural fairness 191; objections, response process 189–90; objections, sales evidence (presence) 190–1; objections, statement format 188–9 New South Wales (NSW) principal place of residence (PPR) 116–20; company/trustee land ownership, exemption (nonapplication) 119; definition 111–21; exemption 116–17; exemption, application (concessions) 117–19; former PPR, sale (concession) 118; owner, death (concession) 119; restrictions 119–20; same family member usage 120; unoccupied land, concession 118; use/occupation, unification 114–16 New South Wales (NSW) sections: Section 21, tax default interest 194; Section 26, tax defaults (penalty tax) 194; Section 43, Chief Commissioner tax payment 194; Section 44, tax recovery (debt status) 194; Section 45, joint/several liability 194; Section 46, third party tax collection 195; Section 86, objections 195; Section 87, objections (grounds) 195; Section 88, objection proof/evidence (onus) 195; Section 89, objection, time (lodging) 195–6; Section 94, objection pending, tax recovery 196; Section 96, Civil and Administrative Tribunal review 196; Section 97, Supreme Court review 196–7; Section 99, review application (time allotment) 197; Section 100, review applications (provisions) 197; Section 106A, Hardship Review Board constitution 197; Section 106B, tax waiver 198; Section 106C, tax refunds 198; Section 526, declaration of category (appeal) 192–3; Section 574, rateable/chargeable land question (appeal) 193; Sections 33/34 186 New South Wales (NSW) taxes: land tax: land exemptions 148–51; payment 112; land tax free threshold removal 343–4; land tax rates/thresholds 144–5; chronology 146–7; land tax threshold 2005 land tax year, removal 145–6; Part 5, interest/penalty tax 193–4; Part 7, tax collection 194–5; Division 1 (general) 194–5; penalty tax (Part 5) 193–4; pre-2005 land tax year 145–6; premium rate threshold, 2009 land tax year/subsequent land tax years 148; state land tax, objections/reviews 193; state taxes, review 37, 183; threshold, 2006 land tax year/subsequent land tax years 147–8; unutilized value allowance, Land Tax Management Act (1956) division 3 153–5; Section 62I, division purpose/interpretation 153; Section 62J, unutilized value (land eligibility) 154; Section 62K, unutilized value allowance (ascertainment) 154; Section 62L, unutilized value allowance (ascertainment process) 154–5; Sections 62M/62N 155 New York City (NYC), recurrent land taxation 244–249; aged persons concession 249; clergy allowance 249; concessions/allowances 249; Maximum Permissible Assessment (MPA) 247; property class tax/definition structure 246–7; property tax 243; assessment 245–7; bills, changes (factors) 248; bills, determination 248–9; Real Property Tax Law 246; rent control concession 249; scenario 247–8; tax, components 246; value/tax basis 245; veterans allowance 249 New Zealand 291; age distribution 292; annual value 298; capital gains tax (CGT) 293; capital value 298; Council Controlled Trading Organizations (CCTOs) 295; GST rate, increase 293; Inland Revenue, internal appeals process 292–3; land/property taxation 296–7; Land Tax Act (1878) 296; land value 298; local government 294–6; tax source 295; Local Government (Rating) Act (2002) 297; Local Government Commission (LGC) 294–5; importance 294; Section 20, trees/minerals 298; tax (raising), local government property rates (usage) 61; tax system: competitiveness 293; mix 291–4; ranking 299; simplicity 291–2; Tax System for New Zealand’s Future 293; uniform annual general charges (UAGCs) 295; universal annual general charge (UAGC) 297; valuation roll intervals 298; valuations, objections 299; value, bases 297–9 Non-Domestic Rating (NDR) Lists 270 non-residential property, grouping 271 Northern Territory (NT): Education Act 180; land tax, imposition (absence) 232; Legislation Act 181; Local Government Act (1993) 141; Local Government Act (2008) 179; local government rates, appeals 232–3; local government rating, exemptions/concessions 140; Real Property (Unit Titles) Act 180; Section 25, review application 231; Section 31, Tribunal decision 231; Section 144, exempt land 179–5; Section 154, record correction 232; Valuation Board of Review 231; value bases 71; values, objections/appeals 231–2 Oakes Inquiry 30, 330–1 objections 183 Offices of State Revenue, online land tax calculators 48 old principal residence, sale (Section 60) 130–1 Opal Mining Act (1995) 172 operational efficiency 305; improvement 346 Optimal Operational Efficiency (OOE) 282 Organization for Economic Cooperation and Development (OECD): Australia, ranking 4; average 3, 8–9; economies 3; dominant base 241; usage 17; recurrent land tax revenue 105 owner: principal place of residence, unoccupied land (concession) 118; registered address test 109 partial home exemption, taxable land value (apportionment) 126–7 pensioners, concessions 29 , 329 personal income 138 Personal Income Tax Sharing Act 331 personal insolvency 276 Physically Defined Standard State (PDSS) 320–1 plant and machinery value 55 Plymouth colonization 244 Plymouth Council, impact 22 Poll Tax 267 Port Macquarie West Bowling Club v The Minister 65 Premium Property Tax Act (1998) 112, 339 premium property tax (PPT), dwelling number assessment 112 Prescribed Classes of Property Regulation 258–9 primary production land (New South Wales) 151–2 principal place of residence (PPR) 105; absence: concession 118–19; Section 56 (Victoria) 128–9; company/trustee land ownership, exemption (nonapplication) 119; data matching/reform 108–10; deeming test 121–3; election, determination 110; exemption: continuation, resident death (impact) 129–30; origins 111; Section 54 128; exemption (NSW) 116–17; application, concessions 117–19; fiscal reform, necessity 110–12; former PPR, sale (concession) 118; old home transition, exemption 124; old principal residence, sale (Section 60) 130–1; owner, death (concession) 119; principal residence land (Section 6) 134–5; resident death, exemption continuation: Section 23 136–7; Section 57 129–30; residual test 123–4; restrictions 119–20; same family member usage 120; status (definition), unity of title rule (usage) 113; unoccupied land: concession 118; principal residence usage 131; use/occupation, unification 114–16; work-from-home arrangements 125 principal place of residence (PPR) definition: New South Wales 111–21; Queensland 121–7; South Australia 132–4; Tasmania 134–5; Victoria 127–32; Section 53 127; Western Australia 135–7 principal place of residence (PPR) land: home use (Section 37) 122–3; home use, demolition/renovations (Section 38) 123; tax, evolution (relationship) 113; tax exemption (South Australia) 132–4; use, business activities (partial exemption) 131; use, non-exempt purpose decision 126 private consumption 138 Private Health Facilities Act (2007) 149 private sector inefficiencies (correction), taxes (usage) 37 Productivity Commissions into Housing Affordability 304 Property Assessment Appeal Board (PAAB) 262 Property Assessment Review Panel (PARP) 262 Property, exchange amount (estimation) 54 property tax (taxation) 343; Denmark 283; evolution/structure 27; increase, Plymouth Council (impact) 22; reform 327–9 PT Limited & Westfield Management Limited v The Department of Natural Resources and Mines 68–9 Public Health and Wellbeing Act (2008) 166 Queensland (Qld): allowable lettings 125; council rates: exemptions 161–2; exemptions, Section 93, land rate levies 161–2; objections/appeals 211–13; DSE equivalence, requirement 161; local government rating, exemptions/concessions 140; Office of State Revenue (OSR), impact 124; primary production land 160–1; Section 53, primary production land usage 160–1; site values, appeals/objections 208–14; state land tax, appeals/objections 213–14; value bases 68–9; work-from-home arrangements 125 Queensland (Qld) acts: Aboriginal Land Act (1991) 162; Aged Care Act (1997) 158; Airport Assets (Restructuring and Disposal) Act (2008) 162; Corporations Act 160; Local Government Act (1993) 140, 141, 161; Manufactured Homes (Residential Parks) Act (2003) 159; QCAT Act 213–14; Queensland Act 72; Residential Tenancies and Rooming Accommodation Act (2008) 159; Retirement Villages Act (1990) 159; Torres Strait Islander Land Act (1991) 162; Transport Infrastructure Act 162; Valuation of Land Act (1944) 68 Queensland (Qld) land: Land Court decision 213; Land Tax Act (1915) 121–2; Land Tax Act (2010) 161; Land Tax Ruling LTA000.1.2 121–4; Land Valuation Act (2010) 161, 208, 210; taxable value, apportionment 126–7; tax exemptions 158–60; Section 46, exempt purpose (meaning) 158; Section 47, charitable institution land ownership exemption 158; Section 51, aged care facilities 158; Section 52, government land 158; Section 53, primary production land usage 159; Section 54, moveable dwelling parks 159; Section 55, port authority land 159; Section 56, recreational/public land 159; Section 57, retirement villages 159; Section 58, other exempt land 160; tax threshold 157–8; concessions/allowances 161 Queensland (Qld) principal place of residence: deeming test 121–3; defining 121–7; land, taxable value apportionment (partial home exemption) 126–7; land use, non-exempt purpose decision 126; land, uses 124–7; main test 121; residual test 123–4; Section 37 (land, home use) 122–3; Section 38 (land, home use/demolition/renovations) 123; Sections 35/36 121; Sections 42A/42B (old home transition exemption) 124; work-from-home arrangements 125 Queensland (Qld) sections: Section 112, property (constitution) 209; Section 113, objection content (requirement) 209–10; Section 121, conference (holding, conditions) 210; Section 122, conference by agreement 210–11; Section123, conference requirement 211; Section 984, categorization (owner objections) 211; Section 985, owner objection (decision) 211–12; Section 987, appeal right 212; Section 988, appeal location/process 212; Section 989, land court constitution/procedure 212; Section 990, appeal (Land Court decision) 213 Rail Safety National Law (Tasmania) Act (2012) 176 Rates Act (2004) 181, 232–4 rating phenomenon, emergence 316–24 Real Property (Unit Titles) Act 180 Recreation Grounds Rates and Taxes Exemption Act (1981) 140, 172 recurrent land tax (taxation): Canada 242, 254–266; components 48–9; focus group composition 307; government tier levy 336–9; international case studies 241; revenue, increase (capacity) 35–6; United States 242, 243–254 recurrent property tax, imposition (problems) 283 reforms 304; approaches 310; summary 346 regulations, control 340–3 residence, absence (concession) 118–19 resident death, exemption continuation: Section 23 136–7; Section 57 129–30 residential property investment, factors 107 Residential Tenancies Act (1997) 166 Residential Tenancies and Rooming Accommodation Act (2008) 159 Retail Leases Act (2003) 167 retail simulation, example 101 Retirement Villages Act (1999) 159 revenue: allocation 14; building, capacity-to-pay framework (usage) 339–46; increase, recurrent land taxes (capacity) 35; raising: broad-based tax concentration 138; example 317; trends 33–6 Revenue Ruling No LT 020 117 Ricardo, David 22–4 right to reside, definition (Section 53A) 127 Roads and Jetties Act (1935) 176 Roads to Recovery Act (2000) 331; Grants and Financial Assistance Grants 333 Rudd/Gillard governments, impact 331–2 Rudd Government, impact 15 salvage value 55 simplicity 36–8, 184, 305 site value (SV) 58; definition, improvement (inclusion) 67 Smith, Adam 36 South Australia: Adelaide City Council, values determination 70–1; annual/capital/site values, objections/appeals 214–16; land tax exemptions 169–71; Section 4, land tax imposition 169–71; land tax, partial exemption (sliding scale) 133–4; land tax rates/thresholds 169; local government rates, objections/appeals 216–17; local government rating 171–3; exemptions/concessions 140; Section 147, land rateability 172–3; principal place of residence (PPR): defining 132–4; land tax exemption 132–4; Section 5(10), land tax exemption 132–4; Renmark Irrigation Trust 170; state land tax, objections/appeals 217–18; value bases 70–1; Valuer-General objection 215 South Australia acts: Community Titles Act (1996) 172; Fire and Emergency Services Act (2005) 172; Land Tax Act (1936) 132, 169; Local Government Act (1995) 141; Section 147 172; Local Government Act (1999) 70; Mining Act (1971) 172; Opal Mining Act (1995) 172; Recreation Grounds Rates and Taxes Exemption Act (1981) 140, 172; Taxation Administration Act (1996) 217; Valuation of Land Act (1971) 70; Part 4 214 South Australia sections: Section 24, valuation objection 215; Section 25B, valuer review 215–16; Section 25C, appeal right 216; Section 25, objection (Valuer-General consideration/decision) 215; Section 94, appeal (time) 217–18; Section 96, appeal (grounds) 218; Section 156, differential rates (basis) 216–17; Section 256, review (rights) 217 special value 55 Spencer v The Commonwealth of Australia 54, 103 stabilization, fiscal policy (usage) 37 stamp duty: rates, progressive reduction 345; revenue generation 34 state land taxation: rates, components 48–9; rating, local government rating (comparison) 311; total revenue percentage 29 State Owned Corporations Act (1989) 150 status quo: land tax reform 310–12; recurrent land tax, reform 306 sub-national government: consumption tax expansion 107; fiscal challenges 32 Superannuation, Guarantee Charge (SGC) 43 Supreme Court Act (1970) 197 Sutton Principle, comparative analysis/rating restructure 315 Sutton v Blue Mountains City Council 313 Sydney Basin, value (evolution) 74 Sydney Cricket and Sports Ground Trust 140 Tasmania: assessed annual values, objections/appeals 218–24; capital values, objections/appeals 218–24; council rates, reviews/objections/appeals 221–3; Division 2, Part 10 223–4; Division 9, rates (liability/payment) 222; Hydro-Electric Cooperation 140; land valuation, root/branch review 70; land values, objections/appeals 218–24; local government rates 175–6; Section 87, exemption 175–6; local government rating, exemptions/concessions 140; Magistrates Court: Administrative Appeals Division 223–4; appeal 222; Part 6, Section 31 (valuation arbitrator) 220; Part 7, land valuation court 220; Part 8, Supreme Court powers 221; Part 9, Division 5 221; Pensioner Concession Card, issuance 174; principal place of residence: definition 134–5; principal residence land (Section 6) 134–5; state government, Final Report recommendations 70; Supreme Court appeal 221; Valuation and Local Government Rating Review 70; value bases 69–70; Valuer-General objection 219 Tasmania acts: Aboriginal Lands Act (1995) 176; Government Business Enterprises Act (1995) 176; Hydro-Electric Corporation Act (1995) 176; Income Tax Assessment Act (1997) 174; Land and Income Taxation Act (1910) 175; Land Tax Act (2000) 173; Land Tax Rating Act (2000) 173; Land Valuation Act (1971) 220; Local Government Act (1993) 141, 175, 221, 222; Local Government (Highways) Act (1982) 176; Marine and Safety Authority Act (1997) 176; Nature Conservation Act (2002) 175; oads and Jetties Act (1935) 176; Rail Safety National Law (Tasmania) Act (2012) 176; Taxation Administration Act (1997) 223; Valuation of Land Act (2001) 218 Tasmania, land tax exemptions 173–5; Section 17, Crown/public lands exemption 173; Section 18, exempt trust land 173–4; Section 19, other exempt land 174–5; Sections 19A/19B/19C 175 Tasmania sections: Section 4C, objections 222–3; Section 29, objections (grounds) 219; Section 30, objections (Valuer-General consideration) 219–20; Section 34, court constitution 220; Section 40, Supreme Court appeals 221; Section 90, review/appeal grounds 224; Section 91, proof (onus) 224; Section 105A, rate/charge review 221–2; Section 123, rates notice objections 222 Tasmania taxes: land tax thresholds/rates 173–6; state land tax, reviews/appeals 223–4; Veterans’ Entitlements Act (1986) 174 tax (taxation): broad-based tax concentration 138; burden, distribution 36; central government collection 8; collection concepts 335; design 17–19; principles 33, 36–9, 37 , 39; framework, top-down/bottom-up reform 333–6; income tax rates, threshold comparison 17; land taxation, status quo 21; mix, categories 9; policy, importance 106; reform (20th/21st centuries) 14–17; reform, inquiries 10–14; revenue: broadening, contrast 311; percentage 7; ranking 9; standoff, existence 106; structure: criteria 36–7; usage 37; system: evolution 4–10; future 348–9; land tax, defining 307–9; realignment 326; reform, Business Council of Australia analysis 18; review, future 11–13; usage 37 Tax Administration Act (1999) 234–5 Taxation Administration Act (1996) 193, 217 Taxation Administration Act (1997) 223 Taxation Administration Act (1999) 232 Taxation Administration Act (2001) 213 Taxation Administration Act (2003) 229 taxpayer: lifecycle, income/net wealth (relativity) 42; scenario, land tax/council rate example 49–53 Threatened Species Conservation Act (1995) 150 Tooheys Ltd v Valuer-General 65 Toronto (Ontario) 263–6; assessment, reconsideration 266; assessment review board: appeal 266; powers/functions 266; Municipal Property Assessment Corporation (MPAC) 264; objections/appeals 265; property tax, calculation 263; property transfer tax 263; property type/numbers 265; recurrent property tax 263–4; value/valuation 264–5 Torres Strait Islander Land Act (1991) 162 trading cost, impact 12 transitional reform framework 345 transparency 36–8, 184, 305 Transport (Compliance and Miscellaneous) Act (1983) 169 Transport Infrastructure Act 162 Triguboff v Valuer General 113–16 uniform annual general charges (UAGCs) 295 Uniform Business Rate (UBR) 267, 270–2; application, example 271; introduction 272 unit 4/35 Green Street, base amount plus ad valorem (calculation) 52–3 unitary structure (government) 336–7 United Kingdom: Community Charge, replacement 267; Department of Communities and Local Government (DCLG) 272; HM Treasury 272; Local Government Finance Act (1992) 271; Local Govt Finance Act (1988) 271; Non-Domestic Rating (NDR) Lists 270; non-residential property, grouping 271; Poll Tax 267; Valuation Office Agency (VOA) 271, 272; Valuation Tribunal for England 272; Value Added Tax (VAT), usage 32; Value Bracket Creep (VBC) 269 United Kingdom (England) 267; Council Tax 267–70; Council Tax bands 269–70; exemptions 268; reviews/appeals 272–3; Uniform Business Rate (UBR) 267, 270–2 United Kingdom (Ireland) 267, 273–8; appeals/reviews 276; deferrals 276; exemptions 275–6; liable parties 273–6; property value 275; unsold residential property 275–6; value bands/tax 274–5; value/valuation 274–5 United States: recurrent land taxation 242, 243–254; Value Added Tax (VAT), usage 323 United States, recurrent land taxation (Los Angeles) 249–53; assessment basis 252; assessments/reassessments 252–3; concessions/allowances 251–2; objections/reviews 253–4; ownership change, reassessment 251; Proposition 13 250; Proposition 13 tax reform 250–1 United States, recurrent land taxation (New York City) 244–249; concessions/allowances 249; Maximum Permissible Assessment (MPA) 247; property class tax/definition structure 246–7; property tax, assessment 245–7; property tax bills, changes (factors) 248; property tax bills, determination 248–9; scenario 247–8; tax, components 246; value/tax basis 245 Unity of Title Rule 57 unity of title rule (four unities rule) 113–16 unity of title rule, impact 113 universal annual general charge (UAGC) 297 unstructured superannuation, homeownership (impact) 107 unutilized value allowance, Land Tax Management Act (1956) division 3 153–5 urban challenge 24–6 utility charges, increase 105–6 vacancy rates 108–9 vacant land transactions: absence 74; availability 313 valuation: cycles, difference 322; frequency 72, 322–4, 322–323 Valuation Objection Form, usage 185, 187 Valuation Office Agency (VOA) 271 Valuation of Land Act (1916) 63, 155–6, 185, 186; land, profitable expenditure (allowance) 64; Sections 33/35/35B 189; Valuation Best Practice Specification Guidelines 67 Valuation of Land Act (1944) 68 Valuation of Land Act (1960) 206 Valuation of Land Act (1971) 70 Valuation of Land Act (1978) 225 Valuation of Land Act (2001) 218 Valuation of Land Acts, concessions/allowances 57 Valuation of Land statutes, usage 56 valuation provider 72 Value: Land Value (LV) 63–5, 70 value: assessed annual value (AAV) 70; Australian bases 61–3; bases, application 320; capital improved value (CIV) 57, 58, 60–1; concept 56; definitions 54–7; estimated annual value, definition 68; evolution (Sydney Basin) 74; government level bases 59; international bases 58–61; land value 49–50; language, imprecision 55; net annual value, definition 68; normative definition 55; phenomenon, emergence 316–24; positive definition 55; site value (SV) 58, 67; value v evidence 66 Value Added Tax (VAT), usage 32 value-based system, development 21 value bases 57–71; Australia 62; Australian Capital Territory (ACT) 71; New South Wales (NSW) 63–6; Northern Territory (NT) 71; Queensland (Qld) 68–9; South Australia 70–71; Tasmania 69–70; Victoria 66–8; Western Australia 71 Value Bracket Creep (VBC) 269 valuers, improvement productivity identification 101–2 Vertical Fiscal Imbalance (VFI) 332, 333; improvement 12 Veterans’ Entitlements Act (1986) 174 Victoria: AVPCC allocation 199; capital improvement, objections/appeals 198–208; council rates, reviews/appeals/ministerial discretion 203–5; fire service levy 35; land: site value 66; tax thresholds 162–3; Land Tax Act (2005) 127, 163, 205; Local Government Act (1989) 141, 168; local government rating concessions 140; local government rating exemptions 140, 168–9; Section 154, rateable land (defining) 168–9; net annual values, objections/appeals 198–208; Public Health and Wellbeing Act (2008) 166; Residential Tenancies Act (1997) 166; Retail Leases Act (2003) 167; sales analysis process, codification 67; site, objections/appeals 198–208; state land tax 205–8; Supreme Court order 208; Taxation Administration Act (2001) 213; Transport (Compliance and Miscellaneous) Act (1983) 169; Valuation of Land Act (1960) 206; value bases 66–8; Valuer-General, consultation 207; Victorian Administrative Appeal Tribunal (VCAT) application 203–4; review 201; Victorian Civil and Administrative Tribunal Act (1998) 202; Victorian Plantations Corporation Act (1993) 167 Victoria, land tax exemptions 163–8; Division 1, principal place of residence 163; Division 2, primary production land 163–5; Division 3, sporting/recreational/cultural land 165–6; Division 4, charities/health services 166; Division 5, accommodation 166–7; Division 6, public government/municipal land 167; Division 7, general exemptions 168; Division 8, transition easements (exemptions) 168; Section 64, geographic boundary descriptions (Melbourne) 163; Section 65, primary production land exemption (outside Melbourne) 164; Section 66, primary production land exemption (inside nonurban Melbourne) 164; Section 67, primary production land exemption (inside urban Melbourne) 164–8; Section 68, primary production land usage exemption 165; Section 69, exemption application 165; Section 70, land parcels 165; Section 71, sporting/recreational/cultural activity land (leasing) 165–6; Section 74, charitable institutions/purposes 166; Section 79, crown land 167 Victorian Civil and Administrative Tribunal Act (1998) 202 Victorian Plantations Corporation Act (1993) 167 Victoria, principal place of residence: absence (Section 56) 128–9; defining 127–32; exemption (Section 54) 128; exemption, continuation (resident death) 129–30; land, business activities (partial exemption) 131; land occupation, lack of fitness (exemption continuation) (Section 58) 130; new principal residence purchase (Section 59) 130; Section 53 (PPR definition) 127; Section 53A (right to reside definition) 127; Section 54 (PPR exemption) 128; Section 57 (resident death, exemption continuation) 129–30; Section 58 (unfit land, exemption continuation) 130; Section 59 (new principal residence purchase) 130; Section 60 (old principal residence sale) 130–1; Section 61 (unoccupied land, principal residence usage) 131; Section 62 (land use, business activity partial exemption) 131; Section 62A, separate residence lease (partial exemption) 132; separate residence, residential purpose lease (partial exemption) 132; unoccupied land, principal residence usage (Section 61) 131 Victoria sections: Section 16, objector (qualification) 198–9; Section 17, objection (grounds) 199; Section 18, objections (lodging time) 199–200; Section 20, objections (information exchange) 200; Section 21, objections, determination 200–1; Section 22, review (VCAT application) 201–2; Section 23, Supreme Court appeal 202; Section 24, review/appeal (grounds) 202; Section 25, review/appeal (powers) 202–3; Section 96, objection 205; Section 97, objection (grounds) 206; Section 98, objection (proof, onus) 206; Section 99, objection lodging (time) 206; Section 100A, property value objections 206–7; Section 101, objection determination 207; Section 106, review/appeal right 207; Section 108, review/appeal (tax payment determination) 208; Section 109, review/appeal (grounds) 208; Section 183, differential rating (VCAT review) 203; Section 184, County Court appeal 203; Section 185B, rates/changes (ministerial directions) 204–5; Section 185C, Minister’s direction (council compliance) 205 Victoria State Business Tax Review Committee, NSW state tax review 37 Von Thunen, Johann 24–5 Wage Accords (1980s) 10, 331 Western Australia: gross rental values, objections/values 225–30; Land Tax Assessment Act (2002) 176; Local Government Act (1995) 141, 227; local government rates 178–9; Section 6.26 178–9; local government rates, objections/reviews 227–9; local government rating, exemptions/concessions 140; merged improvements 71; Mining Act (1978) 178; Part 3, exemptions/concessions/rebates 176–8; Division 4A, non-permanent residences (land use) 178; Division 4, crown land (public purposes: Sections 31–39) 177; Division 5, exemptions/concessions 178; Divisions 2/3 176; Section 29, rural business land use exemption 176–7; Section 30, rural business land, concession 177; State Administration Review Tribunal (SAT) objection 225; state land tax, objections/appeals 229–30; Taxation Administration Act (2003) 229; unimproved values, objections/reviews 225–30; Valuation of Land Act (1978) 225; Valuer-General objection 225–6 Western Australia, principal place of residence: definition 135–7; resident death, exemption continuation 136–7; Section 21 135–6; Section 22 (executor ownership, exemption) 136; Sections 24/24A 137; Sections 25/25A 137; Sections 26/26A 137; Sections 27/27A 137 Western Australia sections: Section 6.76, objection (grounds) 227–8; Section 6.77, objection (local government decision review) 228; Section 6.78, objection time review refusal (decision review) 228; Section 6.79, review matters 228; Section 6.81, rates/services charges payment liability 228; Section 6.82, rate/service charge imposition review 228–9; Section 32, valuation objections 225–6; Section 33, valuation (State Administrative Tribunal review) 226; Section 34, objections/review (Valuer-General advisement) 226; Section 36A, State Administrative Review Tribunal (SAT) review matters 227; Section 36, official assessment objection 229; Section 37, objection (Commissioner assessment) 229; Section 38, objection (determination time limit) 229–30; Section 39, objection determination (reassessment) 230; section 42, review application 230; Section 43A, State Administrative Tribunal decision appeal 230 Western Australia, value bases 71 Whitlam Government, impact 15, 331 windfall gains, privatization 106 Zoological Parks Trust 140 .. .Land Tax in Australia Land Tax in Australia defines how land tax operates and is administered across state and local government in Australia International expert Vince Mangioni reviews the current status and... Local government Land and property taxation Bases of value Objections to valuations Summary Part 4 Reforming land value taxation and fiscal reform of sub- national government in Australia 12 Reforming recurrent land tax under the status quo... state and local (sub- national) government in Australia His PhD is in taxation and focuses on the rating and taxing of land, and his subsequent research focuses on the fiscal reform of subnational government Vince was an advisor