There are charitable exemptions and concessions from land tax under certain circumstances.
Land is exempt from land tax if it is:
- Owned by a charitable institution and used exclusively for charitable purposes,
- Owned by a charitable institution, is vacant, and is declared to be held for future charitable use,
- Not owned by a charitable institution, but is used by a charitable institution exclusively for charitable purposes, or
- Leased to a person or body to be used for outdoor sporting, outdoor recreational, outdoor cultural or similar outdoor activities and is available for use for one or more of these activities by members of the public. The proceeds derived from leasing by the owner must be applied exclusively for charitable purposes
Land is not exempt from land tax if:
- A charitable institution owns land but leases it to another party ( unless another exemption applies), or
- The land is used by the charitable institution for commercial purposes, even if the profits from the commercial activities are used to fund the charitable activities of the institution
Before we can accept that an organisation is a charitable body, its constitution, rules or trust deed must demonstrate that:
- Its objective is exclusively for charitable purposes as defined above,
- No private benefit can be conferred to owners, officers or members, and
- There can be no distribution of assets to members in the event of a winding-up
Charitable purpose is defined as:
- The relief of poverty,
- The advancement of education,
- The advancement of religion, and
- Other purposes beneficial to the community
Land tax and charities
Where a charitable institution holds more than one piece of taxable land, the amount of land tax payable is calculated separately on each land as if it were the only land holding of the charity (i.e. land tax is not calculated on the combined value of all land held by the charity).
If the land is partly used for a charitable purpose, only that portion of the land will be exempt from land tax. Land tax will be calculated on the taxable portion of the land that is not exempt.
Apply for a charitable exemption
You must apply requesting the charitable exemption under section 74.
All applications must be in writing (or scanned and sent via email) and be signed by the owner of the land, or an authorised representative of the owner.
The application must state the grounds for seeking the exemption under section 74 and for what purpose the land is used.
The following supporting documents must be supplied with the application:
- Customer number,
- Property address,
- What the land is used for,
- The date the use of the land commenced,
- The constitution, rules or trust deed (these documents are collectively referred to as governing rules),
- Evidence (in the relevant clauses of the governing rules of the organisation) that you are a non-profit organisation, that the assets and income of the organisation will be applied solely towards the promotion or furtherance of its objectives, that private benefits cannot be conferred to individuals and that assets will be distributed to another charitable organisation in the event of a winding-up,
- Financial statements for the current and previous financial years,
- Details of any commercial ventures, the address and use of any land owned or leased by the organisation,
- Details of prior exemptions granted by us (if the aims and objectives have changed since the last approval, you must advise us and provide new documentation),
- Details of all services provided and activities undertaken (promotional material such as pamphlets, newsletters and brochures should be supplied), and
- Details of any relevant information on exemptions granted by other states, territories or the Commonwealth
Please submit your application to:
State Revenue Office
GPO Box 1641
MELBOURNE VIC 3001
Applications can also be submitted via LTX Express.
After you apply
All applications for exemption are assessed based on the information provided to us at the time of your application. If additional information is required in order to assess your eligibility we will contact you.
The outcome of your application will be advised in writing when a decision has been made.
If you have a land tax liability which is due for payment in full or by instalment whilst your exemption application is being determined, you should pay that amount on time. Under certain circumstances, you may be entitled to contact us to negotiate a provisional amount to pay.
If you do not pay the assessed tax on time and your application is disallowed, interest may accrue daily on the outstanding amount.
Changes in circumstance
If any material changes arise during the exemption period, the charitable organisation is required to notify us as soon as possible in writing.
Changes to the aims and objectives or the principle activities and services provided may cause the organisation to become ineligible for the exemption.
Omissions and errors
You should notify us of certain errors or omissions in your land tax assessment notice within 60 days from the date the assessment is issued.
Failure to notify us may constitute a notification default, which can result in a liability for penalty tax.
Penalty tax is calculated on the additional amount of tax that would have been assessed had the notification been lodged on time.
Charitable institutions that are unsure of their tax obligations, or believe that they have incorrectly received an exemption for non-exempt land, should contact us to make a voluntary disclosure.