❓ Mr. Alban asks the Treasurer for an update on the review of land tax exemptions for primary production, including consultation plans, particularly for his constituents in Swan Hills. The Treasurer outlines proposed changes to the Land Tax Act, including exemptions for processing facilities (with caveats), removal of the one-third income rule, and broadening the owner-user rule.
AnsweredQoN 300Legislative Assembly
QuestionView source ↗
LAND TAX ACT — REVIEW
300. Mr F.A. ALBAN to the
Treasurer:
Could the Treasurer update the house on the government's
review of land tax exemptions for primary production and the targeted
consultation process that will be undertaken to seek community and industry
input, in particular from my constituents in the electorate of Swan Hills, and
how they will apply?
300. Mr F.A. ALBAN to the
Treasurer:
Could the Treasurer update the house on the government's
review of land tax exemptions for primary production and the targeted
consultation process that will be undertaken to seek community and industry
input, in particular from my constituents in the electorate of Swan Hills, and
how they will apply?
AnswerView source ↗
I thank the member for Swan Hills
for that question. I know it is one that he has asked me about as both
Treasurer and Minister for Finance, and it is a very important one. As the
member will remember, for a long time agricultural land was treated as exempt
from the payment of land tax. A couple of years ago the State Solicitor's
Office advised the state's Office of State Revenue of a change in its
interpretation; that is, farms that had processing on their land were
considered by the State Solicitor's Office to be no longer exempt. This
precipitated a wide review of the act—not only that consideration, but
also other aspects of that. In particular, the review looked at the issue of
conditions placed around land in the urban areas that was used for such
purposes. Two rules are applied. The first is the one-third income rule. Under
that rule, in order to get the exemption, people must have one-third of their
income from the agricultural use of the land. The second is the owner–user
rule; that is, to get the exemption, the owner of the land has to be the farmer
or user of the land.
Over the past two years, Treasury and the Department of
Finance have undertaken a review of this. I will shortly release an options
paper. We will go out and again have discussions with interested parties, and
we would like the member's participation in that. The changes are
manyfold. First, we clarify that we intend to change the act to make it clear
that land—even property that is used for primary production purposes—that
has processing on it is exempt. However, the area of the land that has the processing
facilities on it will be liable for land tax. The position we take is that
primary production is exempt, but only that part of the property that is used
for primary production rather than processing. That is a very important
clarification and initiative. We will also get rid of the one-third income rule
and apply a much more sophisticated business case test, as is done in
Queensland. We will also broaden the owner–user rule to include various
other types of trusts and instruments so that we clarify that the individual
does not have to run it directly; he can run it and own it through various
related business entities. Our intention is to go out quickly and consult and
to bring in legislation so that this applies in the 2014–15 land tax
assessment process.
for that question. I know it is one that he has asked me about as both
Treasurer and Minister for Finance, and it is a very important one. As the
member will remember, for a long time agricultural land was treated as exempt
from the payment of land tax. A couple of years ago the State Solicitor's
Office advised the state's Office of State Revenue of a change in its
interpretation; that is, farms that had processing on their land were
considered by the State Solicitor's Office to be no longer exempt. This
precipitated a wide review of the act—not only that consideration, but
also other aspects of that. In particular, the review looked at the issue of
conditions placed around land in the urban areas that was used for such
purposes. Two rules are applied. The first is the one-third income rule. Under
that rule, in order to get the exemption, people must have one-third of their
income from the agricultural use of the land. The second is the owner–user
rule; that is, to get the exemption, the owner of the land has to be the farmer
or user of the land.
Over the past two years, Treasury and the Department of
Finance have undertaken a review of this. I will shortly release an options
paper. We will go out and again have discussions with interested parties, and
we would like the member's participation in that. The changes are
manyfold. First, we clarify that we intend to change the act to make it clear
that land—even property that is used for primary production purposes—that
has processing on it is exempt. However, the area of the land that has the processing
facilities on it will be liable for land tax. The position we take is that
primary production is exempt, but only that part of the property that is used
for primary production rather than processing. That is a very important
clarification and initiative. We will also get rid of the one-third income rule
and apply a much more sophisticated business case test, as is done in
Queensland. We will also broaden the owner–user rule to include various
other types of trusts and instruments so that we clarify that the individual
does not have to run it directly; he can run it and own it through various
related business entities. Our intention is to go out quickly and consult and
to bring in legislation so that this applies in the 2014–15 land tax
assessment process.
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