The 2022-2023 Federal Budget, described as Australia’s ‘plan for a stronger future’ promises to deliver more jobs, and provide cost of living relief to millions of Australians. It also promises to invest in growth in regional areas, health and aged care, education, women’s safety, and national security.
The Budget, branded as a response to the increasing cost of living, proposes reductions in fuel costs, one-off tax free payments of $250 to pensioners, welfare recipients, veterans and concession cardholders, and an expansion of the tax offset for low and middle income earners. Eligible taxpayers will benefit from a $420 increase in their tax returns this financial year.
Despite this, critics observe that the Federal Budget fails to provide sustained measures to support Australians with the soaring costs of living, with the benefits proposed effectively expended within the next six months. The Budget Papers describe these measures as “temporary and targeted” – perhaps disproportionately so, in light of predictions that wages will remain largely stagnant while interest rates continue to rise.
Rather, the Federal Government’s plan for a stronger future appears to focus its sights on increased workforce participation.
The Budget promises an additional $225.8 million to improve educational outcomes for school students, particularly for vulnerable and disadvantaged students, Aboriginal and Torres Strait Islander students, and students in regional and remote areas. Notably, Schools will receive a further $6 million to support respectful relationship education for primary and secondary students. The Australian Human Rights Commission will be funded to survey high school students about consent education.
Levels of exhaustion remain high amongst students, staff and parents, particularly those who faced extended lockdowns or natural disasters. In recognition that no learning is effective without the foundation of student wellbeing, the Budget promises $9.7m to assist schools and teachers to better respond to student mental health and wellbeing concerns.
School funding for non-government schools continues apace with the Budget providing $62.4 million for initiatives that will enable better educational outcomes via the National School Reform Fund and the Non-Government Reform Support Fund. Funding will also be increased for the ‘Emerging Priorities Program’ which will support schools to respond to emerging priorities in the sector, including COVID-19 recovery.
Funding needs in this sector remain high, as the change in the profile of independent schools continues to see the sector growing in the lower-fee (and higher funded) schools. The budget is stated to be committed to supporting parent choice. By extension, this could also be seen as recognition that this sector is incredibly diverse and, in many cases, schools are regarded as the platform which is responsive to the cultural and religious needs of local community in many communities.
Key announcements for early childhood included Community Childcare Fund (CCCF) measures, namely:
Other than these initiatives, early childhood perhaps felt neglected by a budget that was quite silent on the question of childcare affordability, workforce investment and the funding of additional pre-school hours. With childcare continuing, for better or worse, to be a “women’s issue”, it appears the government is relying on previously announced changes to the Childcare System and its introduction of a type of shared paid parental leave to seek to address concerns.
Moores welcomes the initiatives which prioritise the mental health and safety of students, which are vital to ensuring a culture of child safety in the education sector, and also advancing equality at large.
Reforms to the operation of the Fair Work Commission were also foreshadowed, with funding allocated to establishing a dedicated small business unit to assist small business employers to navigate their workplace obligations. Businesses and employees will continue to be supported in managing workplace issues related to the COVID-19 pandemic, with further funding for the Fair Work Ombudsman until September 2022.
Changes to the National Employment Standards also form part of the 2022 Budget, with the expansion of the Paid Parental Leave Scheme broadening the Scheme’s eligibility, providing single parents with an extra two weeks of government-funded paid leave, and affording multiple-parent households greater flexibility in determining who takes up the leave. Noting this flexibility falls short of the “use it or lose it” model which has been deployed in some European jurisdictions, with the result that many more fathers took parental leave, we will watch the outcome of this initiative with interest. (Currently, primary carers are able to take 18 weeks of paid parental leave, and secondary carers only two weeks).
The Budget also foreshadows plans to amend redundancy payment calculation methods, to ensure redundancy packages reflect an employee’s average working hours during the course of their employment. Importantly, the proposed amendments will better recognise the service of employees who have shifted between full time and part time work due to caring responsibilities.
The Budget promises to provide an additional $7.3m in spending for people with disability and their families, largely allocated to a national advertising program to assist jobseekers with disability. However, peak bodies in the sector consider that the sector’s main challenges remain unaddressed. As evidenced by the recent progress report published by the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability, access to adequate NDIS funding remains a key concern for people with disability in Australia. The National Disability Insurance Agency has in recent times faced a 300% rise in appeals by NDIS participants, but disability support advocates were not afforded additional funding in the Budget.
Funding for the aged care sector will see additional home care packages, extended care time for residents of aged care facilities, and 33,800 new training places for aged care workers. The Budget also commits $340 million to embed pharmaceutical services in aged care facilities, with the hopes of improving medication management. Many critics have questioned whether these initiatives are adequate for improving the health and wellbeing of older Australians, who remain some of the least visible and most vulnerable members of our national community.
Peak bodies in the aged care sector have also called upon the Federal Government to increase wages in the sector to attract and retain skilled workers, a recommendation of the Royal Commission into Aged Care. Disappointingly, the Budget does not address this. The Fair Work Commission (Commission) is set to hear an application for pay rises in the sector by the Health Services Union and Australian Nursing and Midwifery Federation, who argue that current wages fall short of the Fair Work Act’s requirement to ensure a safety net of fair minimum wages. Moores will await the Commission’s decision with interest, and hopes for better outcomes for aged care providers and workers.
Moores welcomes the continued commitment to aligning regulation across the care and support sector, including for providers in aged care, veteran care, and disability services. Alignment will enhance the quality and safety of support services delivered to vulnerable Australians, while reducing regulatory burdens on providers caused by duplicate obligations. Moores looks forward to improved information sharing between industry regulators, and more efficient reporting processes for service providers.
The 2022 Budget will build upon on the previous year’s focus on investing in women, bringing total funding across 2021-2023 to $5.5 billion. The Government states this funding will target three priorities: women’s safety, women’s economic security and leadership, and women’s health and wellbeing.
Safety-based initiatives include funding for frontline family, domestic and sexual violence services, including services that are culturally appropriate for Aboriginal and Torres Strait Islander communities, and people from culturally and linguistically diverse backgrounds. Our Watch will be funded to boost its efforts in violence prevention for women with disability, people in the LGBTQIA+ community, and women from migrant backgrounds.
Funding will also be devoted to combatting workplace sexual harassment. Moores welcomes recognition by the Federal Government that addressing sexual harassment in the workplace is integral to advancing women’s participation in the workforce, as well as women’s safety. The Budget promises to further implement the recommendations provided by the Respect@Work: Sexual Harassment National Inquiry Report, including by establishing a dedicated team in the Australian Human Rights Commission for assisting industry to respond to historical complaints of sexual harassment.
The Budget Papers provide for additional initiatives to support women’s workforce participation, with changes to the Paid Parental Leave Scheme promoting increased flexibility for families and equitable care arrangements between parents of all genders. Increased funding will also be provided to the Family Friendly Workplaces initiative, to ensure a further 500 workplaces across Australia are supported to increase flexibility for their workforce. The focus on women’s workforce participation also includes further investments in the Workplace Gender Equality Agency, the statutory body responsible for promoting gender equality in Australian workplaces.
The Budget further promises to invest in initiatives to support women to take up opportunities in under-represented sectors, including trade occupations and the manufacturing and tech industries. These investments will be key to ensuring the Government delivers on its aim to increase women’s workforce participation, having regard to the minimal budgetary consideration for sectors where women are most represented, compared with the promised $17.9 billion infrastructure package. Recent research conducted by the Australia Institute demonstrates that while every million dollars spent on education creates 10.6 jobs for women and 4.3 jobs for men, every million dollars spent on construction creates only one job for men and a mere 0.2 jobs for women.
It was a relatively quiet budget night for charity and not-for-profit regulation, and for the sector’s regulator, the Australian Charities and Not-for-profit Commission (ACNC). Pleasingly, the Budget did announce that up to 28 community foundations affiliated with Community Foundations Australia would receive specific listings as Deductible Gift Recipients (DGRs) from 1 July 2022. These listings will increase the scope and impact that these foundations can have in their local communities and will greatly assist with much needed grass roots initiatives.
The Portfolio Budget Statements note that the ACNC will continue its compliance drive in the upcoming financial year, with a goal to review 2% of charities that have been registered with DGR status. Previously, the ACNC had committed to reviewing 500 registered Public Benevolent Institutions per year, so this new measure may increase the scope of charities with DGR status that could be subjected to ACNC scrutiny.
The Budget has also allocated $1.9 million in funding to the Australian Taxation Office to build a system for the implementation of the previously announced annual reporting requirements for self-assessing not-for-profits. Eligible not-for-profits should pay careful attention as these systems are developed and put into practice.
While the States are ploughing funds into the increase of social housing stock, the Federal Government appears intent on seeking to enable home ownership for more Australian families. The Budget will fund 50,000 ‘Home Guarantee Scheme’ places in the coming financial year, in addition to a new ‘Regional Home Guarantee’ and increased placed under the ‘Family Home Guarantee’ for single parents.
The Budget will also increase the amount of cash that can be released from superannuation accounts under the ‘First Home Super Saver Scheme’ – a regime that allows people to save for a deposit within their superannuation fund (giving an effective tax cut to savings put aside for your first home).
None of these measures appear likely to decrease the demand for social housing. They will, however, introduce additional home buyers into the market which is likely to exacerbate price pressure in a housing market where affordability is already a significant challenge.
One positive measure for social housing is the increase in the NHFIC liability cap by a further $2 billion, lifting to a total liability cap of $5.5 billion. This will increase the capacity of NHFIC to provide (or re-finance) long term debt for social housing providers. Interest savings will increase the borrowing capacity of social providers and hopefully enable them to seize opportunities to use debt finance for the delivery of new housing.
Moores is pleased to see a number of worthy sectors and causes provided for in this budget, but looks forward to further investment in the welfare and social assistance sectors in future.
The team at Moores has expertise and experience in key sectors including education, safeguarding, social housing, not-for-profit and workplace relations. We use our strong commercial sense and practical experience to make a positive impact in our client’s lives and organisations.
Please do not hesitate to contact us for more information.
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On 1 July 2022, the new Child Safe Standards (CSS) come into force, along with new Ministerial Order 1359 (MO 1359). Both instruments have an increased focus on child safety in the online environment. This article covers our top tips for schools and organisations to ensure child safe online environments to mitigate risks to children and young people.
The new CSS, which apply to all organisations in Victoria providing services or facilities for children, contain specific obligations for organisations to:
For schools, a major change in the new MO 1359, which replaces Ministerial Order 870 and implements the CSS, is the updated definition of “school environment” to include additional detail regarding online and virtual school environments. Online and virtual school environments made available or authorised by a school governing authority for use by a child or student are captured by MO 1359 and now specifically include software applications, collaboration tools, and online services in addition to email and intranet systems. This additional detail reflects the increased focus of the new CSS on child safety in virtual environments, and increases obligations on schools to maintain safe online environments.
Earlier this year, the Online Safety Act 2021 (Cth) came into effect. This law includes a world first scheme to take down cyber abuse and protect children and adults from online bullying. See our earlier article discussing these changes here.
According to the eSafety Commissioner, some of the key risks for children and young people in online environments include:
1 in 5 Australian young people reported being socially excluded, threatened or abused online.
1 in 5 Australian young people admitted behaving in a negative way to a peer online — such as calling them names, deliberately excluding them, or spreading lies or rumours.
We recommend that schools and organisations follow these tips to ensure their online environments are safe for children and young people:
If you would like more information about what the new CSS and MO 1359 mean for your organisation or school or what steps you can take to protect children and young people from online harm, please do not hesitate to contact us.
Moores’ e-safety webinar in 2022 will reflect on:
You can access the recording to our 2021 Safer Internet Day webinar on Social Media and Child Safety here.
Please contact us for more detailed and tailored help.
In 2019, the Federal Government announced a Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability (Disability Royal Commission). The Royal Commission has been authorised to inquire into how to effectively prevent harm against people with disability, and achieve best practice in investigating and responding to reports of harm.
The Disability Royal Commission will ultimately result in recommendations for how to improve laws, policies, and practices to ensure a safer, and more inclusive society for people with a disability.
A Royal Commission is the highest independent investigation into a matter of public concern, established by the Governor-General of Australia under the Royal Commissions Act of 1902 (Cth). Royal Commissions have broad powers, including powers to hold public hearings and compel people to participate and give evidence. When a Royal Commission has finalised its investigation and gathered its evidence, it will prepare a report and recommendations for presentation to Parliament, which often leads to significant changes in legislation and policies, and cultural change within society.
The Disability Royal Commission has recently released its fifth Progress Report, covering the progress of the Royal Commission during the period from 1 July to 31 December 2021 (Reporting Period). During the Reporting Period, the Royal Commission held eight public hearings, and 400 private sessions. It also produced a number of reports. Themes emerging from the 878 submissions received during the Reporting Period include:
Public Hearing 13 – Preventing and responding to violence, abuse and neglect and exploitation in disability services was the first public hearing that examined the conduct of a Disability Service Provider, Sunnyfield Disability Service. Recommendations and key themes from this public hearing were identified and further investigation into these themes will be considered by the Royal Commission.
The Disability Royal Commission will continue to investigate and report on experiences in all settings and contexts, including schools, workplaces, secure facilities, family and group homes, hospitals, and day programs. It will release its Final Report by late 2023.
On 3 December 2021, the Australian Government published Australia’s Disability Strategy 2021-2031, which is based on the Royal Commission’s interim report and recommendations. The Australian Government has committed to reviewing the strategy in 2023 following the release of the Royal Commission’s Final Report.
Safeguarding is the action that an organisation takes to promote the safety and welfare of vulnerable people, including children, people with disability, and elderly people. Safeguarding measures can involve the implementation of strategies, policies and procedures, training and screening mechanisms for new staff or volunteers, identifying and mitigating risks, and investigating and responding to concerns and complaints.
The NDIS Commission is empowered to undertake enforcement action to hold organisations accountable for failing to adequately safeguard people with disability from harm and abuse.
At Moores, we provide a broad range of safeguarding services to assist organisations to comply with regulators, mitigate risk, and respond appropriately and comprehensively to safety concerns. We have expertise in harm prevention in the disability, aged care, and child safety sectors, and work closely with regulators, stakeholders, complainants and survivors to strategically advise clients. We assist organisations to model best practice in their safeguarding strategies, and to hear and respond to concerns in a trauma-informed manner.
Our safeguarding team can assist with training; reviews and audits of current systems and operations; ensuring compliance with laws and regulations; development and implementation of policies and procedures; quality improvement; and complaints management. Our Education and Workplace Relations teams are also equipped to advise on discrimination matters, and the obligations of employers and education providers towards people with disability.
If you or your organisation would benefit from assistance with safeguarding vulnerable people within your organisation, please contact us for more information.
Welcome to the sixth in our series on Special Disability Trusts (SDTs), where we hope to demystify particular aspects of these trusts, and highlight the benefits, eligibility requirements and restrictions to look out for.
As discussed in our previous articles in this series, the two main benefits of establishing an SDT for a vulnerable person are:
In this article we discuss the relief from capital gains tax (CGT) that may be available when transferring a CGT asset to an SDT.
Capital Gains Tax laws can be quite complex, with a variety of discounts, exemptions or other forms of relief from paying this tax available, depending on the particular circumstances.
Common examples of CGT assets are shares or real estate (other than for the period a property was the principal place of residence) that were acquired after 20 September 1985 when the CGT laws were introduced in Australia.
Ordinarily if a person disposes of a CGT asset, tax is payable on any increase (gain) between the value at the time they acquired the asset (the cost base) and the value at the time they dispose of the asset. The CGT applies on the increased value, even if the asset is gifted for no money in return.
However, under section 118-85 of the Income Tax Assessment Act 1997 (ITAA 97), any capital gain from a transfer of a CGT asset to an SDT or a trust that becomes an SDT as soon as practicable after the transfer, is disregarded.
In addition to the capital gain being disregarded, the cost base of the property in the hands of the trustee of the SDT is deemed to be equal to the market value of the property when the SDT acquires it (s 112-20 ITAA 97).
In other words, the cost base of the property isn’t just rolled over and transferred to the trustee, but is “refreshed” to the asset’s market value at the time it is transferred to the SDT.
Let’s consider the following example:
If you (or someone you know) are considering gifting an asset (such as shares or real estate) to a SDT, then this could be something to explore further. You should first seek advice from a licenced financial planner who has expertise in this area, to see if this would be suitable for your particular circumstances.
Look out for the next article in our series, when we discuss the Land Tax relief that may be available on real estate owned in a Special Disability Trust.
Please contact us for more information and tailored help.
Submissions are now open for the Australian Government’s request for feedback and comments in relation to the implementation design of the new deductible gift recipient (DGR) category relating to pastoral care services. This follows recent Government announcements about the new DGR category to be established for the purpose of supporting pastoral care services delivered to students in Australian primary and secondary schools. This will improve the ability of entities providing pastoral care services in schools to raise funds by offering tax deductibility to donors. It will also enable entities to receive distributions from public and private ancillary funds.
The Australian Government currently provides significant support to pastoral care services in schools through its National School Chaplaincy Program. The proposed DGR category will supplement support already provided by the Government by encouraging greater private funding of these pastoral care services.
The proposal includes the following key features:
Further details and the full consultation paper can be accessed via the Treasury’s website. Key stakeholders are encouraged to carefully review the proposed design, including the proposed wording of the various elements that would constitute the new DGR category, and to respond to the prompts and questions that are contained within the consultation paper.
Submissions are open until 29 April 2022.
Moores can provide more information or guidance regarding any of the above, including support to submit a formal response.
The majority of the proposed changes to the Guidelines are minor and technical in nature. The only substantive change is that public ancillary funds can seek a merits review of a decision by the Commissioner of Taxation on applications for a lower minimum annual distribution rate (proposed changes).
Ordinarily PuAFs must distribute annually:
A PuAF can apply for the Commissioner to reduce this minimum distribution rate at any time. The proposed change will allow a PuAF to seek a merits review of any decision by the Commissioner not to reduce the annual distribution rate following application by the PuAF.
These proposed changes are likely to also be reflected in the changes to the Private Ancillary Fund Guidelines 2019.
The definition of a de facto relationship for family law purposes is where two people (whether of the same or opposite sex) who are not married nor related by family are in a relationship as a couple on a genuine domestic basis.
For many of our clients, the legal definition of a de facto relationship can be different to how they view their relationship as a couple. Relationships are not nuclear and no two sets of circumstances are the same. The exception is where the couple has a child together. In those circumstances the couple is automatically deemed to be in a de facto relationship.
Why is this important? You might legally be in a de facto relationship without realising. If you are found to be in a de facto relationship and you separate, you and your partner may be entitled to make a claim for a property settlement following the breakdown of your relationship.
It is recognised in legislation that there is a not a “one size fits all” approach when it comes to proving the existence of a de facto relationship. The Family Law Act 1975 (Cth) (The Act) lists a number of factors which are taken into consideration. They include:
In the recent case of Bahan & Pinder [2021] FedCFamC2F 347 (11 November 2021) (Bahan & Pinder) the Court applied the above factors in determining if a de facto relationship existed.
The Applicant maintained that she and the Respondent lived together in Tasmania as a de facto couple from March 2012 to June 2019. The Respondent maintained that the relationship was causal, they were girlfriend and boyfriend, save for a couple of months.
The Applicant was a 31 year old administration assistant. The Respondent was a 29 year old tradesman. His FIFO work meant he would spend 28 days interstate followed by 7 days at home with the Applicant in Tasmania. A significant part of the Respondent’s case was that the parties’ did not reside together, or share a common residence for the majority of time.
The Judge ultimately found the parties’ were in a relationship as a couple on a genuine domestic basis and they were not dating casually. The pertinent evidence included:
Bahan & Pinder provides us with an example of how two people can be determined to be in a relationship on a genuine domestic basis even where they had short periods of separation, their relationship was not monogamous at times, they were of a relatively young age and they spent more time living separately than together due to employment obligations.
If you are currently in a relationship, looking to commence a relationship or have recently separated, it is important to obtain advice from a family lawyer to ascertain the status of that relationship to discuss asset protection or your entitlement to a property settlement under the Act.
The Australian Taxation Office (ATO) has commenced targeted consultation in relation to the upcoming changes for not-for-profit (NFP) entities that self-assess as eligible for income tax exemption (ITE). From 1 July 2023, NFP entities with an active Australian Business Number that self-assess as eligible for ITE will be required to lodge an annual self-review form along with supporting documentation with the ATO. Failure to lodge may result in loss of ITE and penalties may apply.
These reforms were announced by the Australian Government on 11 May 2021 as part of the 2021-22 Federal Budget. The reforms are intended to ensure that only eligible NFP entities access ITE resulting in the increased trust, transparency and integrity of NFP entities within the sector. The additional administrative burden will likely diminish in subsequent years as the ATO is funded to develop an online portal providing NFP entities with the ability to either confirm or amend a pre-filled self-review form.
The changes will affect NFP entities that are not registered charities with the Australian Charities and Not-for-profits Commission (ACNC) and self-assess as ITE. Approximately 125,000 NFP entities[1] will be affected, many of which will be reporting to the ATO for the first time.
These entities fall into eight categories (the ITE categories):
Relevant considerations for all NFP entities seeking to self-assess as ITE are set out below.
All entities should confirm which of the ITE categories listed above (if any) they fall within. Entities should then review specific requirements that apply to their particular ITE category (as set out in the links above).
Generally, the ATO requirement is that an entity that can be registered as a charity with the ACNC must be registered as a charity. This means that an entity that could be a registered charity is not entitled to self-assess as ITE – it must register with the ACNC as a charity to access ITE.
There is a significant overlap between the ITE categories listed above and those organisations that may be entitled to be registered as charities, particularly (but not exclusively) in the cultural, educational and health ITE categories.
A registered charity must report to the ACNC and comply with the ACNC Governance Standards. Registered charities also benefit from charity tax concessions, which are broader than those available to ‘mere’ NFP entities that are not registered charities.
An often-overlooked requirement for all entities seeking ITE is the requirement to comply with the substantive requirements of the entity’s governing rules. This includes[2] the rules that:
The entity must ensure it is acting consistently with the purpose or objects statement set out in its governing rules (which must be aligned with any requisite purpose for its ITE category). Generally, any other purpose of the organisation must be incidental, ancillary or secondary to the required purpose.
The ATO will look at an entity’s governing rules, activities, use of funds and history when considering its ‘true’ purpose. Entities whose activities have changed significantly over time should consider whether those activities are still directed towards the achievement of their purpose. Entities should also consider whether their secondary materials (such as the entity’s annual report, strategic plan, website and key policies) appropriately communicate their purpose.
While a NFP entity can make a profit, that profit must be used for its purposes. This means that the entity must ensure that it is not making payments to members in their capacity as members. The entity must also ensure that it is not making other payments that could be characterised as conferring an inappropriate private benefit (such as excessive payments to employees or directors or payments to directors that are prohibited by the governing rules).
Most ITE categories (with the exception of NFP private health insurers, employment organisations, scientific research funds and resource development organisations) require entities to meet one of three tests:
Even if the entity is not required to meet one of the three tests:
An ITE entity that has a significant presence outside Australia should carefully reviews these requirements to ensure it is complaint.
The ATO has produced the following self-assessment tools. These tools will assist entities to prepare the supporting documentation that is likely to be required for submission to the ATO:
Moores can advise on what these proposed changes mean for your entity and work with you to confirm that the entity is entitled to self-assess as ITE.
[1] Not-for-profit Sector Tax Concession Working Group: Fairer, simpler and more effective tax concessions for the not-for-profit sector (May 2013)[2] Taxation Ruling TR 2015/1
On 10 February 2022, the Senate passed the Corporations Amendment (Meetings and Documents) Bill 2001 (the Bill). The Bill has amended the Corporations Act 2001 (Cth) (the Act), permanently enacting previously temporary changes that had been introduced to provide companies with the flexibility to use technology to meet their obligations in relation to meetings, notices and documents.
Amongst other things, the changes allow companies (including not-for-profit and charitable companies limited by guarantee) to use technology or electronic means to:
We recommend that you:
Moores can review your governing document or assist with any questions that you may have about the changes.
Since we published our recent article Land tax on your home? 6 ways you might get caught out, one particular risk area which we identified seems to have come to the fore – contiguous land.
You may have received a letter from the State Revenue Office (SRO) in recent months warning that you may be at risk of receiving a land tax assessment on “contiguous land” which you own. Unfortunately, these letters are worded vaguely, leaving people wondering what they need to do.
Wonder no more.
In a nutshell, contiguous land means land which is adjacent to your home, but contained in a separate title.
Such land was historically considered part of a person’s principal place of residence or “PPR”, and treated under the Land Tax Act 2005 as exempt from land tax on that basis.
From 1 January 2020, that position changed – now, land contiguous to a PPR will only be exempt from land tax if it is:
This means that if your garden, tennis court or outbuildings are on a separate title, that land will be subject to land tax.
If you’ve received a letter from the SRO stating that you own contiguous land, the first step is to work out whether your property is actually caught by the contiguous land provisions in the Land Tax Act.
This requires an examination of your title plans, and may require a surveyor to conduct a “check survey” to ascertain where the home is located relative to the title boundaries.
If there is more than one title but your home sits over all of them, this is not “contiguous land” – in these circumstances, all titles qualify for the PPR exemption and the SRO should be advised of that.
If your home doesn’t extend over all titles (for example, the home is contained within the boundaries of one title and the second title contains only garden and garage), then you have a contiguous title. In these circumstances, you have a choice to either consolidate the titles into a single title, or keep them separate and accept that you will pay land tax on the contiguous title.
Consolidation involves three key steps:
If you want to ensure that the PPR exemption is applied to all of your land from 2023 onwards, you’ll need to ensure that the consolidation process is completed by no later than 31 December 2022.
When deciding to consolidate, the first thing to consider is your future intentions for the land.
If you’re considering the possibility of developing a second dwelling on the contiguous title, whether for sale or retention, then consolidating the land may not be recommended – you’d likely need to re-subdivide the land in the future to proceed with the development.
To decide whether consolidation is appropriate, you’ll need to weigh a number of different considerations, including:
It’s important that the tax consequences of consolidation are also considered – a tax accountant or lawyer with tax expertise can assist in that regard.
If you’ve received a letter from the State Revenue Office about contiguous land or are worried that you may have a potential liability in this regard, get in touch with us. We’ll guide you through the specifics of how the new rules affect your land and ensure that you avoid any nasty surprises in the next round of land tax assessments.