LAND TAX

The Victorian Government has introduced a surcharge for Land Tax for property that is held by a Trust. This surcharge will apply to assessments for the year 2006 and beyond.

Generally, these provisions impose a surcharge rate of tax (0.375%) on land held by a trustee. The trustee of a trust will be assessed on the aggregate value on all land held in each trust at the surcharge rate of tax. This will apply to all trusts, including discretionary, fixed and unit trusts unless excluded by the provisions. The potential implications of the proposed provisions vary depending on what tyoe of trust the land is held in.

Surcharge Rates for the 2006 year

$ Tax Rates 0 - 19,999 Nil 20,000 - 199,999 $75 & 0.375% of the taxable value that exceeds $20,000 200,000 - 539,999 $750 & 0.575% of the taxable value that exceeds $200,000 540,000 - 899,999 $2,705 & 0.875% of the taxable value that exceeds $540,000 900,000 - 1,189,999 $5,855 & 1.375% of the taxable value that exceeds $900,000 1,190,000 - 1,619,999 $9,843 & 1.875% of the taxable value that exceeds $1,190,000 1,620,000 - 2,699,999 $17,905 & 1.706% of the taxable value that exceeds $1,620,000 2,700,000+ $36,330 & 3.5% of the taxable value that exceeds $2,700,000

For comparison, the Ordinary Rates of Land Tax for the 2006 year

$ Tax Rates 0 - 199,999 Nil 200,000 - 539,999 $200 & 0.2% of the taxable value that exceeds $200,000 540,000 - 899,999 $880 plus 0.5% of the taxable value that exceeds $540,000 900,000 - 1,189,999 $2,680 & 1% of the taxable value that exceeds $900,000 1,190,000 - 1,619,999 $5,580 & 1.5% of the taxable value that exceeds $1,190,000 1,620,000 - 2,699,999 $12,030 & 2.25% of the taxable value that exceeds $1,620,000 2,700,000+ $36,330 & 3.5% of the taxable value that exceeds $2,700,000