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Section 24 (2) of the Land Tax Act 2000 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.
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 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:
For further explanation and examples read Grouping of Related Companies - Guideline