The Commissioner has updated the public ruling on the land tax exemption for a home. LTA000.1.3

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    1. Home
    2. Public Ruling LTA000.1.3 The land tax exemption for a home

    The land tax exemption for a home

    Public Ruling LTA000.1.3
    Issued
    18 June 2025
    Download PDF

    A public ruling, when issued, is the published view of the Commissioner of State Revenue (the Commissioner) on the particular topic to which it relates. It therefore replaces and overrides any existing private rulings, memoranda, manuals and advice provided by the Commissioner in respect of the issue(s) it addresses.

    Where a change in legislation or case law (the law) affects the content of a public ruling, the change in the law overrides the public ruling—that is, the Commissioner will determine the tax liability or eligibility for a concession, grant or exemption, as the case may be, in accordance with the law.

    What this ruling is about

    1. This public ruling outlines the factors the Commissioner uses in determining whether land is used as a home for the Land Tax Act 2010 (Land Tax Act) and explains the operation of the home exemption when land is used both as a home and for other purposes. It also explains the transitional home exemption.
    2. The Land Tax Act provides that land used as a home is exempt from land tax, subject to certain conditions. The Land Tax Act also provides that, when changing homes, an exemption is available for a limited transitional period for land that either was used as the old home or will be used as the new home, subject to certain conditions. In this public ruling, these exemptions are referred to as the home exemption and the transitional home exemption respectively.
    3. The topics discussed in this public ruling are as follows. Examples are provided in Attachment 1.
    Topic Paragraphs
    How the home exemption works 4–7
    Land used as a home—main, deeming and residual tests 8–18
    Meaning of ‘residential purposes’, ‘residence’ and ‘principal place of residence’ 19–26
    Use and absences—person who receives care; demolition or renovations 27–42
    Land also used for purposes other than a home—allowable lettings; work-from-home arrangements; deciding if land is used for a non exempt purpose 43–52
    Apportioning the taxable value of the land for a partial home exemption 53–56
    How the transitional home exemption works 57–64

    Ruling and explanation

    How the home exemption works

    1. The conditions for the home exemption are that the land is:
      1. comprised in one parcel1

      and

      1. either:
        1. owned by a person, other than a trustee or the manager of a time-sharing scheme, and used as the person’s home

        or

        1. owned by a trustee of a trust—other than an absentee—and used as the home of all beneficiaries of the trust

        and

      2. not used for a non-exempt purpose.
    2. Section 36 of the Land Tax Act provides that land is used as a home only if 1 of 3 tests is met.
    3. A partial exemption is also available where land is used as a home but also for a non-exempt purpose.2
    4. The flow chart in Attachment 2 shows how the home exemption works. In summary, the home exemption applies as follows:
      1. use as a home only—full exemption
      2. use as a home and use that is not a non-exempt purpose—full exemption
      3. use as a home and non-exempt purpose—partial exemption.

    Land used as a home

    1. Section 36 of the Land Tax Act provides that land is used as the home of a person for a financial year if one of the following applies:
      1. That land—and no other land—has been continuously used by the person for residential purposes, whether alone or with another person, for the 6-month period (the 6-month residency period) ending when a liability for land tax arises for the financial year (the main test).
      2. The land is taken to be used as the person’s home under ss.37 or 38 (the deeming test).
      3. Otherwise—the Commissioner is satisfied the land is used as the person’s principal place of residence, whether alone or with another person, when a liability for land tax arises for the financial year (the residual test).
    2. Only one of the tests needs to be met.

    Main test

    1. The test in s.36(1)(a) of the Land Tax Act applies where only one parcel of land is used continuously as a person’s residence for a 6-month period. Two conditions must be met if the land is to be considered as being the person’s home:
      1. The land must have been used by the person for residential purposes (whether alone or with others) for a continuous period of 6 months ending on the relevant 30 June when liability arises for the financial year.
      2. No other land has been used by the person continuously for residential purposes during the same period.
    2. This is the principal test because most people have only one residential property that is occupied as their home.
    3. This test is an objective test that does not depend on the Commissioner’s satisfaction with the circumstances. If the conditions are met, the land will be taken to be the person’s home.

    Deeming test

    1. This test deals with the circumstances, outlined in ss.37 and 38 of the Land Tax Act, where land is taken to be a person’s home despite the person being absent for certain reasons during the 6-month residency period.
    2. Section 37 of the Land Tax Act provides that land is taken to be used as a person’s home in the circumstances where the person is not in occupation because of illness or having to reside elsewhere to receive care. For more information, refer to paragraphs 32–36 of this public ruling.
    3. Section 38 of the Land Tax Act provides that land may be taken to be a person’s home when the person is not in occupation temporarily because of renovations to the residence, or the existing residence has been demolished and a new residence is being constructed on the land. For more information, refer to paragraphs 37–42 of this public ruling.

    Residual test

    1. Where the main or deeming tests do not apply, in order for the land to be considered to be used as a person’s home, the Commissioner must be satisfied the land is used as the person’s principal place of residence (whether alone or with other persons) at the relevant 30 June.
    2. In deciding whether land is used as a person’s principal place of residence, s.36(2) of the Land Tax Act provides that the Commissioner may have regard to the following:
      1. the length of time the person has occupied a residence on the land
      2. the place of residence of the person’s family
      3. whether the person has moved their personal belongings into a residence on the land
      4. the person’s address on the electoral roll
      5. whether services such as telephone, electricity and gas are connected to the land
      6. whether the person acquired the land with an intention to occupy a residence on the land as their principal place of residence
      7. any other relevant matter.
    3. The residual test depends on the Commissioner being satisfied that the facts support the conclusion that the land is used as the person’s principal place of residence. This test must be applied by the Commissioner on a case-by-case basis after considering all the facts and circumstances.

    Meaning of ‘residential purposes’, ‘residence’ and ‘principal place of residence’

    1. The tests refer to land being used for ‘residential purposes’ or as a ‘principal place of residence’. They can also involve consideration of ‘a residence’ on the land. Because these terms are not defined in the Land Tax Act, their meaning must be understood by reference to their ordinary usage and legislative context.
    2. The term ‘residential’ means ‘based on or connected with residing’. The term connotes a degree of permanence, referring to where a person lives for some time or as their usual abode. This would commonly be a person’s house, townhouse, home apartment or other dwelling place.
    3. Where the tests refer to ‘a residence’, the term means a house in which one resides, a dwelling place or a large house. A ‘dwelling’ is a place of residence, a house or a continued or habitual residence.
    4. The ordinary meanings of ‘a residence’ and ‘dwelling’ indicate that a permanent fixed structure that is suitable for human habitation generally characterises a residence. This would include, for example, a home unit or townhouse.
    5. Residing in a caravan or boat on land would not satisfy any of the tests in s.36 of the Land Tax Act. These are not permanent fixed structures on the land.
    6. Further, occupying a shed or garage on land would generally suggest the land is not being used as a home, because these structures are not generally designed, approved or used for long term human habitation. However, the full circumstances around the occupation may support that the land is being used for residential purposes or there is a residence on the land.
    7. The expression ‘principal place of residence’ refers to the principal place in which a person resides. Section 36(2) of the Land Tax Act provides a list of factors the Commissioner will have regard to in determining whether land is used as a person’s principal place of residence. These factors are listed in paragraph 17.
    8. Where a person resides in more than one place during a year, the question of which place is their principal place of residence is a question of fact and degree. In these cases, it is necessary to examine the history and circumstances, the purpose for which each property is used, the duration of ownership and the amount of time spent during the year in each.3

    Use and absences

    1. For the main test, the person claiming the land as their home needs to reside on the land in order for the land to be regarded as being used by them for residential purposes. Similarly, the residual test requires that the land be used as their principal place of residence. Further, the deeming test has conditions requiring previous use for residential purposes (s.37) or as their principal place of residence (s.38).
    2. The term ‘used’ in this context refers to actual use and not simply an intention to use. For land to be used it must be actually used, not contemplated or intended to be used or be merely suitable for use. Consequently, the construction of a home on what was previously vacant land would not result in the land being used as a person’s home, despite their intention to occupy the land as their home following completion of construction.
    3. In cases where a person is temporarily absent from the land at the relevant 30 June and neither s.37 nor s.38 of the Land Tax Act apply, the Commissioner may still be satisfied under the main test in s.36(1)(a) or the residual test in s.36(1)(c) that the land is the person’s home.
    4. Temporary absences may occur for reasons such as holidays, illness, fire, flood, business or employment commitments. Each case must be considered on its facts to determine whether or not the absence has resulted in the land ceasing to be the person’s home. Further, if a person does not ordinarily reside in Australia (whether or not they are an absentee under s.31), it is unlikely land in Queensland would be their home under s.36 of the Land Tax Act.
    5. As previously mentioned, under the deeming test there are particular circumstances where land is deemed to be used as a person’s home despite their absence. These circumstances are set out in ss.37 and 38 of the Land Tax Act and are explained in the following paragraphs.

    Person who receives care

    1. Section 37 of the Land Tax Act provides that land is taken to be used as a person’s home in the circumstances where they are not in occupation because of illness or having to reside elsewhere to receive care.
    2. Subject to paragraph 34, land is taken to be a person’s home for a financial year if all the following apply:
      1. The person who owns the land received care for all or part of the 6-month residency period.
      2. The person used the land for a qualifying residential use4 before they started to receive care.
      3. The person has used the land for a qualifying residential use continuously for a period of at least 6 months.
    3. A person receives care if one of the following apply:
      1. They reside at a hospital as an inpatient.
      2. They receive residential care at a residential care service.
      3. They reside on other land that is not owned by them and are under the care of someone else.
    4. Paragraph 33 will not apply if income has been derived from use of the land during the 1-year period ending on the relevant 30 June when the liability for land tax arises, except where that income is derived from a lease, licence or other arrangement under which a person has a right to occupy the land if:
      1. the right of occupation is for not more than 6 months in the 1-year period

      or

      1. the income is not more than is reasonably required to cover
        1. rates and other charges levied on the land by the local government for the land
        2. maintenance expenses for the land.
    5. The maximum period for which a person may be taken under paragraph 33 to use the land as their home is 6 years from the end of the last period of at least 6 months during which the land was used by them for a qualifying residential use.

    Demolition or renovations

    1. Section 38 of the Land Tax Act provides that land may be taken to be a person’s home when the person is not in occupation temporarily because of renovations to the residence, or the existing residence has been demolished and a new residence is being constructed on the land.
    2. Land will be taken to be a person’s home for a financial year if all the following apply:
      1. The Commissioner is satisfied that the person is temporarily residing elsewhere, when a liability for land tax arises for the financial year, because
        1. a residence on the land has been or is being demolished and a new residence is being or will be constructed

        or

        1. a residence on the land is being renovated to an extent requiring it to be vacated.
      2. The land was used as their principal place of residence at some time during the 6-month residency period.
      3. The person intends to resume using the land as their principal place of residence before a liability for land tax arises for the next financial year.
    3. With regard to establishing the matters detailed in paragraph 38, the following evidence is to be provided to the Commissioner:
      1. evidence of building work or renovations (e.g. council approval)
      2. a statutory declaration by the person declaring (where applicable)
        1. that they have resided on the land as their principal place of residence and stating the date on which such occupation commenced
        2. details of any use of the land other than as their home
        3. the date on which they ceased to reside on the land as their principal place of residence
        4. the reasons for ceasing to reside upon the land as their principal place of residence
        5. either
          1. they have re-occupied the land as their principal place of residence after construction or renovation was completed and stating the date on which such occupation recommenced

          or

          1. their intention to re-occupy the land again as their principal place of residence by the following 30 June
        6. any other relevant facts.
    4. A person must give written notice to the Commissioner stating they are not using the land as their principal place of residence where both the following apply:
      1. They have received the benefit of an exemption on the basis of s.38 for a financial year (the relevant year).
      2. They fail to resume using the land as their principal place of residence before a liability for land tax arises for the next financial year (i.e. before the next 30 June).5
    5. The notice must be given to the Commissioner within 28 days after the date the liability mentioned in paragraph 40(b) arises.6
    6. The Commissioner must make a reassessment of the person’s land tax liability for the relevant year on the basis that the land was not exempt.7

    Land also used for purposes other than a home

    1. Where land that is used as a person’s home is also used for another purpose, a full home exemption may still be available depending on the nature and extent of the other use. To obtain a full home exemption, the other use must not be for a non-exempt purpose. Therefore, the Commissioner must decide whether the land is being used for a non-exempt purpose.
    2. The Commissioner will not consider land is used for a non-exempt purpose if all the following apply:
      1. The land is used as the home of a person (principal resident) for a financial year.
      2. When liability for land tax arises for the financial year either or both of the following apply:
        1. there is a permitted number of ‘allowable lettings’ for the land
        2. a person residing on the land has a work-from-home arrangement.
      3. The Commissioner is satisfied the land is used only for the purposes mentioned in paragraphs (a) and (b) when a land tax liability arises for the financial year.

    Allowable lettings

    1. An allowable letting is one where a person has been given the right to occupy a residential area8 on the land (the leased area) under a tenancy agreement.9 The following conditions apply:
      1. The leased area is not more than 50% of the total floor area of all residential areas on the land.
      1. The leased area is not a residential area that
        1. is one of three or more flats in a building

        and

        1. is not used for residential purposes by the principal resident.
      2. The leased area is used by the occupant for residential purposes10 and the occupant has not given the right to occupy any part of the area to another person under a tenancy agreement.
      1. The rent payable for the leased area is not more than the market rent for the area.
    2. An allowable letting where the occupant is a member of the principal resident’s family is called a ‘family letting’.
    3. A member of a person’s family means each of the following:
      1. the person’s spouse11
      2. the parents of the person or the person’s spouse
      3. the grandparents of the person or the person’s spouse
      4. a brother, sister, nephew or niece of the person or the person’s spouse
      5. a child, stepchild or grandchild of the person
      6. the spouse of anyone mentioned in paragraph (d) or (e).
    4. The permitted number of allowable lettings for the land is:
      1. one allowable letting

      or

      1. two allowable lettings if
        1. at least one of the lettings is a family letting

        and

        1. the total floor area of the leased areas for the lettings is not more than 50% of the total floor area of all residential areas on the land.

    Work-from-home arrangements

    1. A work-from-home arrangement, referred to in paragraph 44(b)(ii), must meet the following conditions:
      1. The person doing the work must live on the land.
      2. The person must be working from home under an arrangement with their employer.
      3. The work must not involve using the land for a purpose for which, or in a manner in which, residential land is not ordinarily used.

    Deciding if land is used for a non-exempt purpose

    1. Where land is used as both a home and for another purpose, the Commissioner may decide that the land is being used for a non-exempt purpose if both the following apply:
      1. The Commissioner is satisfied that the use of the land for other purposes is substantial.
      1. The other purposes do not fall within the exceptions for allowable lettings and work-from-home arrangements.
    2. In deciding whether the use of land for other purposes is substantial, the Commissioner must have regard to the following factors:
      1. whether a person other than the principal resident has been given a right to occupy any part of the land under a tenancy agreement12
      2. whether a person—other than the principal resident or a member of the principal resident’s family who uses the land as their home—works on the land as an employee or contractor (disregarding work on the land itself or a building situated on the land, such as repairs, renovations and landscaping)
      3. the extent to which a person uses the land, or has set the land aside for use, for purposes other than as the home of the principal resident
      4. whether the gross income generated during the financial year immediately before the relevant financial year from business or an income producing activity on the land is more than $30,000
      5. any other relevant matter.
    3. Depending on the circumstances, any one or more of these factors alone may be sufficient for the Commissioner to determine that use of the land for a purpose other than as a home is a non-exempt purpose.

    Apportioning the taxable value of the land for a partial home exemption

    1. Where land is used both as a home and for a non-exempt purpose, a partial home exemption is available.13
    2. The Commissioner apportions the taxable value of the land between the use of the land as a home and the use of the land for non-exempt purposes, having regard to:
      1. the proportion of the land used for each purpose
      1. the extent to which each proportion is used for the purpose.14
    3. The apportionment method will vary, depending on the circumstances. For example, in cases where part of the land is set aside exclusively for the non-exempt purpose, it may be appropriate to apportion solely on a floor-area basis. However, this may not be an appropriate basis where the non-exempt purpose use is not physically separated from the home use. In the latter case, it may be appropriate to consider both floor area used for the non-exempt purpose and the time and extent of use for that purpose.
    4. Where there is only one family letting for the land, the family letting is taken to be included in the use of the land as a home.15

    How the transitional home exemption works

    1. If a person is in the process of moving home and owns both the old home and the new home as at 30 June, the home exemption will only apply to the land used as the person’s current home. However, the transitional home exemption may apply to the other property—that is, the land previously used as the person’s home (old home) if they have already moved; or the land to be used as their home (new home) if they have not yet moved. In the explanation below, ‘liability date’ for a financial year means midnight on 30 June immediately preceding the financial year.

    Exemption for old home after moving

    1. A transitional home exemption is available for an old home after moving to the new home16, if the person owns both the old home and the new home and all the following conditions are met:
      1. On the liability date for the relevant financial year, their new home is eligible for a full or partial home exemption.
      2. On the previous liability date, the person was not the owner of the new home.
      3. Since the previous liability date, the person has continuously owned the old home.
      4. On the previous liability date, their old home was eligible for a full or partial home exemption.
      5. On the next liability date, the person is not (or will not be) the owner of the old home.
    2. Subject to paragraph 60, their old home is exempt land for the relevant financial year, to the extent the old home was eligible for a full or partial home exemption on the previous liability date.
    3. The old home will not be exempt land if the person receives rents or profits from:
      1. the new home before it is used as their home, unless the new home was acquired subject to a lease and the lessee gave vacant possession on the earlier of the end of the lease or 6 months from the acquisition

    or

      1. the old home after it ceases to be used as their home.

    Exemption for new home before moving

    1. Alternatively, a transitional home exemption is available for a new home before moving from the old home17 if the person owns both the old home and the new home and all the following conditions are met:
      1. On the liability date for the relevant financial year, their old home is eligible for a full or partial home exemption (other than because the land is taken to be used as a home during demolition or renovations under section 38).
      2. On the next liability date, the person is not (or will not be) the owner of the old home.
      3. On the previous liability date, the person was not the owner of the new home.
      4. On the liability date for the relevant financial year, the new home is capable of being used for residential purposes.
      5. On the next liability date, the new home is (or will be) eligible for a full or partial home exemption.
      6. On the next liability date, the person is still the owner of the new home.
    2. Subject to paragraph 63, the person’s new home is exempt land for the relevant financial year to the extent the old home is eligible for a full or partial home exemption on the liability date for the relevant financial year.
    3. The new home will not be exempt land if the person receives rents or profits from:
      1. the old home after it ceases to be used as their home

    or

      1. the new home before it is used as their home, unless the new home was acquired subject to a lease and the lessee gives vacant possession on the earlier of the end of the lease or 6 months from the acquisition.

    Reassessment

    1. A person must give written notice to the Commissioner if the person received the benefit of a transitional home exemption but has not met the conditions for the exemption. The notice must be given within 28 days after this occurs. The Commissioner must reassess their land tax liability for the relevant year on the basis the land was not exempt.18

    Date of effect

    1. This public ruling takes effect from the date of issue.

     

    Simon McKee
    Commissioner of State Revenue
    Date of issue: 18 June 2025

    References

    Public Ruling Issued Dates of effect
    From To
    LTA000.1.3 18 June 2025 18 June 2025 Current
    LTA000.1.2 6 June 2011 1 July 2011 17 June 2025
    LTA000.1.1 30 June 2010 30 June 2010 30 June 2011

    Attachment 1

    Examples

    Land used as a home

    Main test and residual test
    1. Sam is the owner of 2 properties on 30 June 2022. Sam occupied the High Street property as their principal place of residence until 25 January 2022. On 26 January 2022, Sam commenced living at Low Street as their principal place of residence.

    The main test in s.36(1)(a) of the Land Tax Act does not apply because neither property was continuously used by the owner for residential purposes for the 6-month period before 30 June 2022.

    However, the residual test in s.36(1)(c) of the Land Tax Act applies to the Low Street property, which was used as at 30 June 2022 as Sam’s home.

    Further, the transitional home exemption may be available for the High Street property, subject to relevant conditions being met.

    1. Xiang and Yuan own a block of land on which they are constructing a house. In the meantime, they live in a shed on the land. They moved into the shed in September 2021 and were still residing there as at 30 June 2022. Their personal belongings have been moved into the shed apart from some items that are in storage. The telephone and electricity have been connected.

    The shed has not been designed for human habitation. It has been designed for, and will be used as, a shed once the house has been constructed. This suggests the land is not being used as a home. However, sufficient evidence has been provided that the land is used for residential purposes. The main test in s.36(1)(a) is met and the land will be regarded as Xiang and Yuan’s home for the 2022–23 financial year.

    1. Harold owns a house at the Gold Coast and a business in Brisbane. Generally, from Monday to Friday, he resides in a unit he owns in Brisbane close to his business. On the weekends, he returns to his Gold Coast address where his wife resides on a full-time basis. Harold’s electoral roll address is the Gold Coast. The majority of his personal belongings are at the Gold Coast. Neither parcel of land meets the requirements of the main test in s.36(1)(a) of the Land Tax Act because Harold had more than one residence during the 6-month period ending at the relevant 30 June. However, having regard to the factors listed in paragraph 17, the Commissioner would be satisfied—in accordance with the residual test in s.36(1)(c)—that the Gold Coast land is used as Harold’s principal place of residence.
    2. Felix is a professional footballer with a Brisbane club. He enters into a contract to play with a Victorian club for the next 3 seasons. Felix owns a house in Brisbane and rents an apartment in Melbourne. He moves his family and belongings to Melbourne where they remain for the duration of the contract.

    The use of the Brisbane land does not meet the requirements of the main test in s.36(1)(a) of the Land Tax Act and the Commissioner cannot be satisfied, under the residual test in s.36(1)(c), that the Brisbane land is used as Felix’s principal place of residence. Therefore, the Brisbane land would not be exempt as land used as a home.

    1. Xanthe owned 2 properties at 30 June 2022. One property is a house at Mission Beach, which is her residential and postal address as well as her address on the electoral roll. Xanthe has been using the property as her home since 2019.

    The other property is a house at Noosa, which is more valuable than the Mission Beach property. Xanthe claimed the home exemption on this property for 30 June 2022.

    Xanthe is registered in the White Pages telephone directory for both the Mission Beach and the Noosa properties. In November 2021, Xanthe starting spending November to April at the Noosa house and the remainder of the year at the Mission Beach house.

    Neither parcel of land would meet the requirements of the main test in s.36(1)(a) of the Land Tax Act because Xanthe had more than one residence during the 6 months ending 30 June 2022. However, having regard to the indicators listed in paragraph 17, the Commissioner would be satisfied—in accordance with the residual test in s.36(1)(c)—that the Mission Beach land is used as Xanthe’s principal place of residence and therefore would receive the exemption for land used as a home for the 2022–23 financial year.

    1. Pradeep takes an extended overseas holiday commencing on 4 April 2022 and returning on 9 March 2023. During his travels he stays for short periods in hotels or with friends. Pradeep allows a friend, Uros, to reside at his Toowoomba home for security purposes. In return, Uros pays money into Pradeep’s bank account to cover household costs for the period. The household costs include those Pradeep or Uros would normally incur themselves during the same period. These costs include electricity, gas or telephone accounts but exclude mortgage repayments or the equivalent of rent at market rates. Pradeep leaves most of his belongings behind and does not change his mailing address with service companies.

    The use of the Toowoomba land meets the requirements of the main test in s.36(1)(a). No other land has been used for residential purposes for the 6 months to 30 June 2022, because Pradeep started his holiday in April and did not use any overseas land in a long-term or settled way during this time. The arrangement between Pradeep and Uros is one that is only incidental to Pradeep’s residential use of the Toowoomba land.

    Deeming test
    1. Carl is unable to live in his property unassisted. He moves into his daughter’s home in March 2022. Carl’s grandson moves into Carl’s house, and under the arrangement the grandson pays Carl an amount equal to the local government rates and charges incurred by Carl in relation to his property.

    Carl does not meet the occupancy requirement for the main test in s36(1)(a). However, his circumstances fall within s.37 of the Land Tax Act. Therefore, the land is taken to be Carl’s home for land tax purposes for the 2022–23 financial year.

    1. Mateo owns a number of parcels of land in Queensland, including property (parcel 1) purchased in October 2020. Parcel 1 was Mateo’s home. In May 2022 Mateo moved out and resided at another address while his old home was demolished and a new home was built. He intended moving back in September 2022 when the new home was due to be completed.

    In respect of Mateo’s landholdings as at 30 June 2022, he claims the exemption for land used as a home on parcel 1 and provides a copy of the building approval along with a statutory declaration covering the matters detailed in paragraph 39.

    The Commissioner will be satisfied parcel 1 is Mateo’s home under s.38 of the Land Tax Act for the 2022–23 financial year. The assessment of land tax for the 2022–23 financial year, based on Mateo’s landholdings as at 30 June 2022, will reflect the exemption for his home.

    1. The same facts as Example 8, but Mateo could not move back in until September 2023 due to building delays.

    Mateo is required to notify the Commissioner within 28 days after 30 June 2023 that he did not resume using the land as his principal place of residence.

    The Commissioner will reassess Mateo’s land tax liability for the 2022–23 financial year on the basis that parcel 1 was not exempt.

    Lettings

    Allowable letting
    1. Christina owns a 2-storey house that is her home. She uses an online marketplace platform to lease part of the bottom floor of her house to Dmitry at market rent under a short stay arrangement. The land is not used for any other purpose.

    The arrangement between Christina and Dmitry would be considered a tenancy agreement. It is not an allowable letting because it is not for residential purposes. The Commissioner would consider the substantiality factors in paragraph 51 to determine whether to allow a full home exemption for the land or a partial exemption based on an apportionment of the land value for that part of the land that Christina uses as her home.

    1. Lina owns a large house that is her home. She converts part of the house into a small self contained studio apartment for her own use and leases the rest of the house to Jian. The leased area is greater than 50% of the total floor area of all residential areas on the land.

    The lease of the balance of the house to Jian is not an allowable letting because the leased area is greater than 50% of the total floor area of the residential areas. This use of the land for a purpose other than for a home (the lease to Jian) would be a non-exempt purpose because Jian is renting a significant part of the house. Only a partial home exemption would be available. Each residential area is self-contained, so it would be appropriate in this case to allow an exemption in respect of the proportion of the total floor area used by Lina as her home.

    1. Angelo owns a parcel of land on which there is a block of 6 flats. Angelo occupies flat 1 as his home and rents flat 2 to his brother and sister-in-law at market rent. Other flats are rented to other tenants.

    There are no allowable lettings in respect of flat 2 or the other flats because, in the case of a block of 3 or more flats, an allowable letting must relate to a flat occupied by the owner of the flats as their home (in this case, flat 1).

    The renting of the 5 flats would be a non-exempt purpose. A partial home exemption would apply. Apportionment on a floor-area basis would be appropriate in this case.

    1. Brooke owns all 6 units in a block. She lives in unit 1 with her family, rents unit 2 to her mother at market rent and rents the remaining units to various tenants.

    Each unit is a separate parcel of land with its own title. Unit 1 is used solely as Brooke’s home and will attract the full home exemption. There are no allowable lettings in relation to unit 1.

    In relation to unit 2, there can be no allowable letting because that unit is not land used by the landowner (Brooke) as her home. The exemption would not apply for that unit or any of the other 4 units let to tenants.

    Family letting
    1. A 2-storey family home is owned by parents who live there with their children. Two grandparents live in a granny flat that occupies the whole of the ground floor. The grandparents do not pay any rent.

    The whole of the property is being used as a home because, like the occupation of the home by the children, the grandparents are part of the family’s occupation of the home. A full home exemption applies.

    If the grandparents had been renting the downstairs flat at market rent, this would be a family letting provided all other conditions for a family letting were met. The family letting would also be regarded as part of the use of the land as a home and a full home exemption would still apply.

    Also, if the parents enter into a tenancy agreement with one of the children in addition to the family letting arrangement with the grandparents, that second tenancy agreement would also be a family letting provided all other conditions were met. A full home exemption may still apply if the total floor area of the leased areas for the lettings is not more than 50% of the total floor area of all residential areas on the land.

    Using the home for work or business purposes

    1. Teresa owns a combined neighbourhood grocery shop and flat, which is her home.

    The use of the land as a shop is a non-exempt purpose. Only a partial home exemption would apply. Apportionment of the home exemption would depend on all the relevant circumstances of the case. Assuming the grocery shop and flat are separate areas without any other use, and any yard is only used for home purposes, apportionment based on the floor area of the grocery shop would be appropriate in this case.

    1. Erin lives with Finn in Finn’s home. Erin is employed as an architect and works two days a week from a home office from where she accesses her employer firm’s computer systems to upload and download work and communicate with supervisors via email and telephone. Erin works at the employer’s premises 3 days a week. Erin rarely meets clients at the home.

    This is a work-from-home arrangement. A full home exemption would apply.

    If Erin routinely met with clients or held other regular business meetings at the home, it would not be a work-from-home arrangement because this extent of business use would be using the land in a way that residential land is not ordinarily used. This would be a substantial non-exempt purpose because the home is virtually an additional place of business for her employer. A partial home exemption would apply to Finn’s home. In this case, relevant factors for apportionment may be the area of the land used for business purposes and the amount of time the area is used for business purposes.

    1. Val is a member of a band. The band does not earn significant income from performances and Val therefore continues to work full time in a music store, pursuing music in their own time. They also make about $10,000 a year from music lessons, which they give intermittently in their lounge room after work on weekdays.

    The degree of Val’s musical activities is not significant. There is no dedicated area for giving music lessons, and the income generated by their music activities on the land is still well below the benchmark of $30,000. Because the use of the land other than as a home is not substantial (as explained in paragraph 51), a full home exemption would apply.

    1. George owns a large house that is his home. He rents a small bedroom to a boarder at market rent and does office work at home for his employer 3 days a week but does not see clients at home.

    Because the conditions of a work-from-home arrangement and allowable letting exist, the use of the land other than as a home is not substantial and a full home exemption would apply.

    1. The same facts as for Example 18 except that George also rents another bedroom to a second boarder.

    The provisions for permitting an allowable letting and a work-from-home arrangement will not apply because there is more than one allowable letting (none being a family letting). Consequently, it is necessary to consider whether these other uses are considered to be a non-exempt purpose. In this case, there is a substantial non-exempt purpose—namely the 2 boarding arrangements and the use of the home for the business of the employer. A partial home exemption would apply. Relevant factors to take into account for apportionment may include the floor area of the rented areas, the floor area of George’s home office and the time the home office is used for office work.

    1. Pauline owns a business that she runs from commercial premises, but often takes paperwork home at night and on weekends. She works on this paperwork in a bedroom that has been set up as a home office. The room is also used for other purposes such as personal computing, home accounts and reading.

    The use of the home office is not a work-from-home arrangement for land tax purposes. Pauline has no employer so there is no arrangement with an employer that this work would be done from her home. However, the home office is not exclusively set aside for work purposes but is integrated into the home and continues to be used for residential purposes. Also, the use of the land for a purpose other than as a home is not significant because it is used only after business hours and it is not a place of business. Use of the room in this way is incidental to the residential use of the property. It is not a non-exempt purpose. A full home exemption would apply.

    1. Leon is a share trader who works from an office in his home. This home office is exclusively set aside for Leon’s share-trading activities. He earns $75,000 per annum from his trading.

    A business is being carried on from the home office, which is used exclusively for generating income. This is not a purpose for which residential land is ordinarily used. In addition, the business generates significant revenue (more than $30,000). This is not a use that is incidental to the residential use of the land. It is a non-exempt purpose. Only a partial home exemption is available. Apportionment on a floor-area basis would be appropriate for working out the exemption because the home office is exclusively for the share-trading activity.

    1. Kim is a glass blower and has retail outlets in two shopping centres. The business is still relatively small; and employees craft ornaments in a shed at the back of Kim’s home, transporting the finished work to the shops.

    Because Kim’s employees work on the land to a significant extent, this would constitute a non-exempt purpose. (These arrangements would not be a work-from-home arrangement because Kim’s employees do not reside on the land and this type of activity involves using the land for a purpose for which, and a manner in which, residential land is not ordinarily used.) Only a partial home exemption would be available. On the basis that the shed is dedicated to production of Kim’s trading stock, apportionment of the home exemption based on the floor area of the shed would be appropriate in this case.

    1. Joe supplements his regular income by running a small auto-repair business from a workshop behind his home. Joe made a gross income of $31,000 in the relevant financial year, and had one casual employee who also worked in the workshop.

    The combination of factors indicate the use of the land other than as a home is a non-exempt purpose: Joe engaging in an income-producing activity on the land; the amount of income generated through that activity; the fact Joe employs another person who works on the land; and the fact the workshop is set aside for Joe’s business use. A partial home exemption would apply, and apportionment based on the area of the land Joe uses for the business would be appropriate in this case.

    Setting aside part of the land for a purpose other than use as a home

    1. Liam’s home is on acreage. He decides to construct a practice track on the land for fellow members of his dirt bike club. Liam uses the track, and also charges a nominal fee to the club for members to use the track. The track takes up a quarter of the block. Liam also constructs an access road for members to get to the track and keep them away from Liam’s home (for privacy).

    A significant part of the land has been set aside for a purpose other than use as a home. The fact that only nominal income is generated by the activity does not prevent this purpose from being a non-exempt purpose because it is not necessary that the non-exempt purpose be a business or commercial purpose. This would be a non-exempt purpose, so only a partial exemption would be available. Apportionment based on the area of the land Liam set aside for the track and the access road would be appropriate in this case.

    Transitional home exemption

    1. Frank settled on the purchase of his new home on 10 June 2022. He moved out of his old home and occupied the new one on the same day. He owned both homes on 30 June 2022. He obtained bridging finance until the sale of his old home on 8 August 2022.

    Frank can apply for the home exemption on his new home and the transitional home exemption on his old home for the 2022–23 land tax year.

    1. Margaret owns a home in which she has lived for 2 years. In March 2022, she signed a contract to build a new home on another property with a building completion date of 15 July 2022. Margaret owns both properties on 30 June 2022. She plans to sell the property in which she currently lives once she can move into the new property.

    Margaret is still living in her original home at 30 June 2022 and can claim the home exemption on this property for the 2022–23 land tax year.

    The new home is still in the early stages of construction at 30 June 2022 and the land is a worksite. Margaret cannot claim the transitional home exemption on that property because it is not capable of being used for residential purposes on this date.

    Attachment 2

    The home exemption

    Diagram of how the land tax home exemption works

    Footnotes

    1. A ‘parcel’ means an area of land that is the subject of a separate valuation: Schedule 4 of the Land Tax Act.
    2. Section 42 of the Land Tax Act
    3. Deane v Commissioner of Stamp Duties [1996] 2 Qd R 557 at 566-567; Fowell v Radford (1969) 21 P & CR 99
    4. A ‘qualifying residential use’ means use of the land—and no other land—by the owner for residential purposes, whether alone or with another person: s.37(7) of the Land Tax Act.
    5. Section 44(1)-(2) of the Land Tax Act
    6. Section 44(3) of the Land Tax Act
    7. Section 44(4) of the Land Tax Act
    8. A ‘residential area’ means a building, part of a building, or another place of accommodation, that is used or available for use for residential purposes: Schedule 4 of the Land Tax Act.
    9. A tenancy agreement includes a lease, licence or an agreement or arrangement about boarding or lodging for a person: Schedule 4 of the Land Tax Act.
    10. This excludes short stay visitor accommodation (often arranged through online marketplace platforms) since ‘residential’ in this context means long-term use as a person’s usual abode—see paragraph 20.
    11. The term ‘spouse’ also includes a party to a civil partnership under the Civil Partnerships Act 2011 or a de facto partner.
    12. This includes short-stay visitor accommodation as well as long term residential use.
    13. Section 42 of the Land Tax Act
    14. Section 42(3) of the Land Tax Act
    15. Section 42(4) of the Land Tax Act
    16. Section 42A of the Land Tax Act
    17. Section 42B of the Land Tax Act
    18. Section 44A of the Land Tax Act