Primary production exemption and land tax
Find out if you can claim a land tax exemption for your primary production land 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.
Eligibility
The primary production exemption is available 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 rulings on:
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.
How to calculate land tax
Your liability for land tax is based on land you own at midnight 30 June each year.
If your application for a primary production exemption is approved, your total taxable land will exclude that land.
- Read more on how to calculate land tax.
- Use the land tax estimator to calculate your liability.
Lucy’s company owns 3 properties. The properties have a total taxable value of $2,599,999.
One of the properties is 100% eligible for the primary production exemption. It has a taxable value of $1,599,999.
Lucy successfully applies for the exemption on behalf of the company. Her total taxable value is reduced to $1,000,000 ($2,599,999 less $1,599,999).
- Without the exemption, the company’s land tax would be $38,999.95.
- With the exemption applied, their land tax is $12,500.
Record keeping
If you claim the primary production exemption, you must keep accurate records to substantiate your eligibility.
Apply for exemption
To apply for a primary production exemption, you need to complete Form LT11. There are 3 ways you can do this:
- Option 1: Create a full-access QRO Online account to apply for the exemption and manage ongoing land tax obligations.
- Option 2: Create a quick-access QRO Online account to apply for the exemption only.
- Option 3: Complete an online version, without having to create an account.
Before you start, you must have created your personal QRO Online account and verified your identity. If you need help with this, you can:
- watch our video tutorial
- read our technical help.
Follow these steps to apply for the exemption.
- Log in to QRO Online.
- For land held by an individual, select the My land tile. (If you can’t see this tile, you may not have finished verifying your identity.)
- For land held by a company or trust, select View accounts and then the client account you want to access. (If you can’t see any accounts, check that you have linked your personal account to the company or trust.)
- Select Manage exemptions from the side menu.
- Select Lodge new exemption.
- Select the LT11 tile.
The explanatory notes under the tile will help you complete the form. - Complete the form and click Submit.
If you have trouble submitting the application, log out of QRO Online. Wait, then log in again using Google Chrome. Your form will be saved in Manage exemptions under Actions. Check the details and click Submit.
You can check the progress of your application under Actions:
- Edit draft—means you have saved your application as a draft, but not yet submitted it. Make sure you have completed all fields and click Submit.
- View form—means you have submitted your application.
- If approved, you’ll see your exemption by selecting Manage exemptions from the left menu.
- If not approved, we’ll notify you in writing.
Before you start, you must have created your personal QRO Online account. If you need help with this, you can:
- see how to create an account
- read our technical help.
Follow these steps to apply for the exemption.
- Log in to QRO Online.
- On the Home screen, select Apply for a land tax exemption (under ‘Online forms’).
- Enter your identification details and click Next.
- Select the LT11 tile.
The explanatory notes under the tile will help you complete the form. - Complete the form and click Submit.
We’ll send you a decision notice confirmation after we have processed your exemption claim.
You can submit Form LT11 online. Read the guide, complete the fields (including the declaration) and press Submit.
We’ll send you a decision notice confirmation after we have processed your exemption claim.
Also consider…
- Read the public ruling on land used for primary production (LTA053.1).