COMPLEXETIES OF THE NEW LAND TAX BILL

In late 2019, the passing of land tax reforms resulted in top rate of land tax decreasing from 3.7% to 2.4%. However, land held by trusts and aggregate land held by related companies have attracted special higher rates. Previously, landlords owning properties in separate legal entities paid land tax on those separate properties. With the aggregation reforms, land held in trusts or related separate entities will accrue tens of thousands more in land tax. These changes have come into effect in the 2020 – 21 financial year.

Recently, a total of 13,5000 tax bills for this period have been delayed due to the complexities with rebates and changes to thresholds. A 12-month extension for trustees to nominate a beneficiary was announced providing time for the assessment of these delayed bills such that landlords and property owners can evaluate their eligibility for rebates and initiative regarding the structuring of their assets.

It is a pertinent time to consider the significant implications on the structures used in asset protection. Families and businesses with trusts or related companies that are holding land have until the end of this financial year to be eligible for rebates before the transition period finishes.

If you require advice around trusts or asset protection or need help in understanding the new reforms and how they affect you, Straits Lawyers are here to help. We are now offering online services in both English and Chinese.

Please note that this article does not constitute legal advice and Straits Lawyers will not be legally responsible for any actions you take based on this article.