Revenue NSW updates land tax ruling for retirement villages and aged care

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Updated land tax guidance has been issued by Revenue NSW around exemptions for aged care facilities and retirement villages under Section 10R of the Land Tax Management Act 1956 (NSW).

Ruling LT 031 v2 supersedes LT 031 from 1991, and gives guidance on calculation of tax for land only partially in use as a retirement village or aged care home, as well as circumstances where unused land obtains development approval or where parts of buildings are used for purposes not exempt under the Act.

“Where land is only partly used for either or both purposes, the owner may be entitled to a reduction in the (average) land value of the land for land tax purposes, equal to the proportion of the land or buildings (or a combination of both) used for an exempt purpose.

“The purpose of this Revenue Ruling is to explain how their liability is calculated where they are entitled to a reduction in the land value,” the ruling reads.

One example given concerns land subject to a partial exemption, where 40% of the land with a taxable value of $10 million is occupied by retirement living units and 60% has units planned; under these circumstances, the taxable value is reduced by 40% to $6 million.