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Grouping of Related Companies for Land Tax
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Section 24 (2) of the Land Tax Act 2000 external link icon provides that related companies are to be grouped for land tax purposes. Grouped companies will have the value of their land holdings aggregated to determine the amount of land tax payable by the group.

Why group companies?



Land tax is a progressive tax, meaning the greater the value of the land holding a person owns, the higher their land tax liability.

For example:
    A person owns two parcels of land, both valued at $75,000. The land tax payable on the aggregated value of the land ($150,000) would be $1,117.50.

    If the same person owned one of those parcels of land in their own right and established a company to own the other, the land tax payable would be $355 on each parcel, a total liability of $710.

The inclusion of company grouping provisions in the Act, ensures that all owners pay the amount of land tax applicable to the value of their total landholdings.

In addition, the grouping of companies in Tasmania is in line with the practice in other jurisdictions and provides a consistent approach to assessing company land tax.

A Statement of Company Details PDF icon should be completed by any company that currently owns or purchases land in Tasmania

What are related companies and how are they grouped?



Two companies are related to each other for land tax purposes if:
  • A person has, or the same people together have, a controlling interest in both companies;
  • The companies are related bodies corporate for the purposes of the Corporations Act;
  • One of those companies is related to a company to which the other is related; or
  • Where two companies have shareholders in common in certain circumstances.

For further explanation and examples read Grouping of Related Companies - Guideline PDF icon

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