Primary production and land tax
Find out if you can claim an exemption and what you need to do to apply.
If all or part of your land is used solely for the business of primary production, you may be eligible for a land tax exemption if the land is used for the following activities:
- maintaining animals to sell them or their bodily produce, including their natural increase
- cultivating land to sell produce
- propagating or cultivating plants or mushrooms to sell them or their produce
- planting or tending trees in a plantation or forest to sell the trees or their produce
- another activity that is agriculture, dairy farming or pasturage
- an activity that is directly related to and supporting a primary production activity and carried on for the same business.
You may claim the exemption for multiple parcels of land using the one application form (Form LT11) as long as the land is used for a primary production activity and is carried on for the same business of primary production (e.g. separate application forms are required if you run your own cattle on 1 parcel and agist another parcel to a grazier and want to claim exemptions for both).
Read the public ruling on land used for primary production (LTA053.1).
Eligible owners
The exemption will only apply if the land is owned by:
- an individual (other than a trustee or absentee)
- a relevant proprietary company
- a charitable institution
- a trustee of a trust if all beneficiaries of the trust are persons mentioned above.
Running a primary production business
To be eligible for the exemption, you must be conducting a primary production business. To determine this, we consider if the primary production activity:
- is a commercial enterprise in the nature of a going concern
- is being carried on for the purpose of profit on a continuous and repetitive basis
- is conducted in an organised and systematic manner rather than on an ad hoc or haphazard basis
- conforms with established commercial principles for the operation of that type of business
- uses a system or systems, as well as record keeping.
A business may be conducted even if profit is limited or when a loss is made.
Primary production activities that are token, trivial or more like a hobby will not be eligible for the exemption.
Suresh has built multiple cabins on his property for short-term accommodation. He also keeps a small number of cattle on the property. The bulk of his business profits derive from the accommodation activity and he has not sold cattle regularly for more than 5 years.
Because he does not use the land solely for primary production, and his business is primarily accommodation, he would not be eligible for the exemption.
Abigail has several beehives on her rural property. She consumes some of the honey, gives some away and sells some at a roadside stall. She has irregular sales and does not keep financial records.
The evidence does not support the idea that the land is solely being used for the business of primary production.
Primary and secondary production
A business of primary production is considered to end—and secondary production (i.e. the processing of the primary product) begins—when another process transforms the primary product into a derivative product.
Cattle grazing would be considered primary production. An abattoir would be considered secondary production. The land used for the abattoir would not be primary production exempt land.
Record keeping
If you claim the primary production exemption, you must keep accurate records to substantiate your eligibility.
How to apply
To apply for the primary production exemption, you can:
- apply using QRO Online—see how to apply for and track a land tax exemption online
- download the application (Form LT11) and send to us—you will be advised of the outcome by post or email.