Page 2047 - Week 08 - Tuesday, 8 September 1992
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While the provision will be sufficient to cover the majority of cases, eligible owners who are suddenly placed in situations where their absence is expected to be of a longer term are, through the provision of one year's exemption, given time to examine their options. If they wish to commercially rent their property, it will be necessary for them to recognise that in most cases land tax will be payable. Genuine cases of hardship will continue to be considered under the justice and equity provisions already in the Act. When considering such cases, the commissioner will have regard to the owner's full circumstances, and the question of whether or not the residence is commercially tenanted will be an important factor. The transitional arrangements covering employment and compassionate exemptions allow owners who have received an exemption under the existing provisions to be deemed eligible under the new provisions. In addition, persons who did not receive an exemption under the employment provision will have an opportunity to seek reconsideration of their applications under the new criteria.
Another significant amendment contained in the Bill is the provision to allow the payment of land tax by quarterly instalments from the 1993-94 rating year. It is proposed that the instalment dates for land tax be the same as those for rates, that is, 15 August, 15 November, 15 February and 15 May, to minimise administrative costs. These instalment dates applied to land tax prior to the move to a single payment in 1990. There are, of course, significant costs involved in this move to instalments, particularly in interest forgone. To ensure that the costs of the move are fully recovered, the Bill provides for a slightly increased land tax rate to be determined for those property owners wishing to pay by instalments.
The Bill contains a number of other amendments which will improve the administration of, and provide additional equity in, the application of both rates and land tax. The definition of "owner" currently in the Act includes "occupier, lessee, tenant or holder of the land", which would allow the commissioner to impose land tax on, for example, a tenant. The Bill amends the definition to cover only the registered owner of the land, or a mortgagee in possession who, through the operation of the mortgage, has control of the property. Speaking of the owner, it has been brought to the commissioner's attention that certain landlords, in order to escape the payment of land tax, are contemplating assigning their tenants a one per cent interest in the property. This would enable the tenant/owner to claim a principal place of residence exemption. To overcome this potential avoidance scheme, the Bill provides that a principal place of residence exemption can be claimed only where the resident owner holds a 20 per cent interest in the property or, where there are more than five owners, his or her share is in the same proportion as that of the other owners.
Another area where the Bill proposes a tightening of the legislation is in respect of residential flats. Under the current legislation, where a block of flats is not strata titled but located on a single parcel of land and the owner is occupying one or more of the flats as his or her principal place of residence, the whole parcel of land is exempt from land tax. The Bill proposes an amendment which will allow the owner to continue to receive an exemption for his or her principal residence, but the remaining flats will be subject to land tax. The legislation will exclude residential properties approved for dual occupancy and granny flats where one of the dwellings is a principal place of residence of the owner.
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