Grouping of Related Companies for Land Tax

The Land Tax Act 2000 provides for related companies to be grouped for land tax. Land holdings of grouped companies are aggregated to determine the amount of land tax payable by the group. This approach is consistent with that for individuals who own multiple properties.

Why are companies grouped for land tax purposes?

Land tax is imposed on a progressive scale. The inclusion of company grouping provisions ensures that related companies pay an amount of land tax determined by the value of their total land holding. The company grouping provisions apply irrespective of whether multiple properties are held directly or indirectly through shareholding in another company that owns land.

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 Commonwealth Corporations Act 2001;
  • 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 please refer to the Grouping of Related Companies Guideline.

 

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