Exemption for construction or renovation of a principal place of residence

Key information

Land on which a principal place of residence (PPR) is being constructed or renovated is exempt from land tax. 

You must apply for this exemption. It is not applied automatically.

Generally, you can only claim one PPR exemption at a time. But there are limited exceptions.

How to apply

• Apply for the exemption in My Land Tax or by calling us on 13 21 61.
• Provide supporting information to help us work out whether you are eligible.
• If construction or renovation will take place over multiple years, you can submit one application for exemptions for those multiple tax years. 

Exemption requirements

Land must meet these conditions as at 31 December in the preceding year: 

• A qualifying person did not use and occupy the land as their PPR.
• Construction or renovation works have started but are not yet finished. 
• A qualifying person plans to use the land as their PPR for at least 6 months starting on or before the qualifying occupation date.
• You did not derive any income from the land.
• Where land is subject to a right to reside:
  • the land was exempt as PPR land before the right to reside was granted
  • the person who has the right to reside is not entitled to any other PPR exemption.
• You are not entitled to another PPR exemption. 

This exemption is only available for construction or renovation of your PPR that finishes on or after 1 July 2022.

Qualifying person

This is the person who must use and occupy land as their PPR after the construction or renovation finishes. 

• If land is owned by a natural person, they are the qualifying person. 
• If land is subject to a right to reside, the qualifying person is the person who has the right to reside on the land.
• If land is held under a fixed trust, the qualifying person is the relevant vested beneficiary.

After the qualifying person moves in, the land may become exempt as a normal PPR in the next tax year.

The qualifying person must use and occupy the land as their PPR for at least 6 months, starting on or before the qualifying occupation date.

Works start date

Usually, this is the earliest of:

• the date the planning or building permit is issued, or
• the date the construction or renovation starts.

You can also nominate a works start date if you do certain preparatory work, such as:

• obtaining a quote
• consulting an architect, builder or planner
• preparing an application for a planning or building permit.

To nominate your own works start date, you must contact us to provide evidence when you apply for the exemption. We may accept or reject your nomination.

Works finish date

This is usually the date the occupancy permit or the certificate of final inspection is issued. If you don't need an occupancy permit or a certificate of final inspection, you must contact us to provide evidence of when the works finished.  

Qualifying occupation date

This is the date a qualifying person must start using and occupying the land as their PPR.

It is the earlier of:

• 6 months after the construction or renovation finished
• 4 years after the construction or renovation started.

Exemption period

The exemption is available for up to 4 tax years after the works start. 

For example, if construction started in 2022, you may be able to claim the exemption for the 2023, 2024, 2025 and 2026 tax years.

We can extend this exemption for up to 2 more years if:

• the builder you have contracted goes into liquidation
• a liquidator has been appointed to wind up the company
• the liquidation has stopped the work from finishing by the planned date.

You must apply for this extension through My Land Tax.

Partial exemptions

If only part of the land meets the exemption requirements:

• the exemption applies only to that part of the land
• land tax applies to the rest of the land (unless exempt).

Joint owners

If some joint owners do not meet the exemption requirements: 

• land tax will not be assessed at the joint owner level
• the aggregated landholdings of each non-eligible joint owner may be separately assessed.

If the exemption is revoked:

• land tax will be assessed at the joint owner level
• the aggregated landholdings of each non-eligible joint owner may be separately reassessed. 

Notify us

If we have granted you an exemption, you must contact us in certain circumstances.

If you fail to notify us, interest and penalty tax may apply.

• If an occupancy permit or a certificate of final inspection is not required – notify us of the works finish date within 30 days of the works finishing.
• If the construction or renovation is not completed within 4 years – notify us within 30 days of the 4-year period expiring.
• If a qualifying person does not move into the residence as their PPR – notify us within 30 days of the qualifying occupation date.
• If a qualifying person does not meet the residence requirement – notify us within 6 months and 30 days of the qualifying occupation date.
• If you plan to sell the property – notify us at least 30 days before you stop being the owner of the property.

Revoking an exemption

We may revoke your exemption for the full exemption period if:

• the construction or renovation has not finished within 4 years of the works start date
• a qualifying person does not meet the residence requirement
• you sell the property before finishing the construction or the minimum residence period.

If we revoke your exemption, we may assess or reassess you for land tax.