Charities are unnecessarily paying land tax and council rates

Exemptions from land tax and council rates are available for properties in Victoria that are used for charitable purposes, even if the property is owned by a third party and occupied by the charity under a commercial lease. Despite the availability of these exemptions, some charities are still paying land tax and/or council rates.

Moores has been able to assist in preparing and submitting applications and ensuring that exemptions are provided where properties are used for charitable purposes. Charitable funds don’t come easy and we know that every little bit counts. Land tax and/or council rates can add up and exemptions are a welcome relief, providing extra funds for charities to get on with making a positive difference in the world.

If your charity owns or leases property in Victoria, it’s definitely worth checking whether or not it is unnecessarily paying land tax and/or council rates. Below is some further information regarding eligibility for exemptions.

Land tax

Land tax exemptions are provided for charities under the Land Tax Act 2005.  Exemption is not automatic – it is granted only in response to an application.  In order for a property to qualify for a land tax exemption, the State Revenue Office must be satisfied that:

  • the entity utilising the property is a charitable institution; and
  • the land is used by that entity exclusively for a charitable purpose, or the land is vacant and is held for future charitable use.

Council rates

Council rates exemptions are provided for charities under the Local Government Act 1989.  In order for a property to qualify for an exemption the property must be used exclusively for charitable purposes.

Land tax and council rates exemptions for charities that are tenants

Charities don’t need to be the owner of a property in order for an exemption to be granted.  A charity that is a tenant can make an application for an exemption for land tax and/or council rates.

You may need authorisation from the taxpayer (the landlord) to make the exemption application.

There is likely to be some benefit in making an application for a tenanted property, since:

  • the charity may be directly or indirectly paying land tax and/or council rates through rent and outgoings; or
  • the landlord may be willing to pass on, in full or in part, the land tax and/or council rates savings to the charity.

Retrospective exemptions

Applications for exemptions are normally granted for current and future assessments.  However, in some instances retrospective applications may be successful, and it is worth making a retrospective request alongside any request for an exemption for current or future land tax and/or council rates.

How we can help

If you need assistance with seeking a charitable exemption for land tax or council rates, please do not hesitate to contact us.