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Changes to recovery of land tax by lessors

  • June 23, 2017

Changes to recovery of land tax by lessors

Amendments have been made to the Land Tax Act 2010 in the Government’s Budget bills in response to the Vikpro Pty Ltd v Wyuna Court Pty Ltd decision. 

The changes will have the effect of restoring the prohibition on landlords directly passing on the cost of land tax to tenants under commercial leases entered into after 1 January 1992 and before 30 June 2009. The Government has made this change in response to the Court of Appeal decision which had the effect of repealing the previous prohibition.

The Vikpro decision does not affect residential leases under the Residential Tenancies and Rooming Accommodation Act 2008 or any retail leases under the Retail Shop Leases Act 1994.

The Property Council holds concerns over the impact that these amendments will have on long-term retail, industrial and commercial leases. Prior to the amendments passing, the Property Council unsuccessfully sought the Treasurer’s intervention to put these amendments out for broader consultation.