Page 5274 - Week 14 - Thursday, 19 November 2009
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Firstly, the bill will ensure that any outstanding taxes under the Rates Act 2004 and the Land Tax Act 2004 are paid in full for a parcel of land before the parcel can be subdivided into units.
Secondly, it will ensure that a redetermination of unimproved land values for error or changed circumstances can be applied across all affected years for the determination of an average unimproved value.
Thirdly, it will clarify that the definition of an owner of a parcel of land includes owners who have obtained effective ownership of the land, but who have not yet been registered on the title to the land.
And fourthly, it will provide a stronger mechanism to help ensure that property owners and their agents notify the ACT Revenue Office about the rental status of a property for land tax purposes.
The first amendment will ensure that the rates or land tax payable on a property are paid when the property is subdivided into units. Under the current provisions, the rates and land tax acts impose liability on the new owners of a subdivided property from the beginning of the financial year or quarter after the subdivision occurs. This has made it difficult in some circumstances to recover the full amount of rates and land tax.
Ordinarily, with the sale of a property, the liability for any outstanding rates and land tax transfers to the new owner along with the change in the ownership of the property. The amendment will bring the payment of taxes for unit owners in a subdivision into line with those for other property owners.
The second amendment made by this bill will ensure that there is a consistent approach to applying unimproved values in the Rates Act. The amendment will ensure that the average unimproved values that are used to calculate a rates or land tax liability can be corrected across time when they are inaccurate. Such inaccuracies arise when a clerical error is made or a change in circumstances occurs which affects the unimproved value of the land. The amendment aims to eliminate inequity between taxpayers by ensuring that only correct values are used when calculating rates or land tax liabilities.
The third amendment will ensure that an owner who has not yet become registered on the title to the land is an owner for the purposes of the rates and land tax acts. The amendment will clarify that the rates and land tax acts impose liability on owners of land when they obtain effective ownership of land, regardless of whether or not the necessary formalities surrounding the registration of the person’s name on the title to the land have been completed.
The fourth amendment is being made to provide a more robust mechanism for property owners to notify the ACT Revenue Office when their property becomes rented. It will provide clarity and certainty for taxpayers by providing a standard method for notification. The process implemented by the amendment will better ensure that notification of a property’s rental status will occur in a timely fashion and reduce non-compliance.
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