Land Tax Exemption
Canberra has a rental affordability problem, and HomeGround is part of the solution. Enquire nowTake advantage of the ACT Government Land Tax Exemption Scheme
Through the ACT Government’s Land Tax Exemption Scheme, eligible property owners and investors can legally reduce their land tax liability by offering their property as an affordable rental.
HomeGround is a fully licensed real estate agent and is approved to provide this much-needed service in Canberra. Our model is built from the ground up to make it simple and competitive for property owners and investors to support the market in this way.
What are affordable housing scheme properties?
- Affordable rental housing includes apartments, units, townhouses and free-standing homes in the private rental market and the community housing sector.
- These homes are offered for rent at a discounted price that is less than 75% of the full market rate.
Your investment and savings stack up.
When you factor in land tax savings alongside competitive rental returns, and the added existing tax savings for rental properties and negative gearing, the numbers work.
We pride ourselves on having no hidden costs. We handle everything from tenant sourcing and lease management, to maintenance and compliance all for an agreed fixed percentage, so you know that both your (property and your investment) (are they the same thing?) are in safe hands.
How the ACT Government Land Tax Exemption scheme works with your property investment.
Step 1
Land Tax Exemption
If your property is being offered for rent at a rate that is less than 75% of market rate, and the tenant meets income eligibility requirements, you may fit the ACT Government’s criteria for full land tax exemption.
Step 2
ATO Tax Ruling
We have an ATO class ruling that may allow us to provide you with a tax deductible donation receipt for rent foregone by offering your property at less than 75% of market rate. This would enable you to reduce your assessable income and your tax savings, dependant on your personal marginal tax rate.
Step 3
Benefits to owners and tenants
The tax incentives mean that for a minimal impact to your hip-pocket, you can make a big difference to assist a household or family on low to moderate income. No matter which option suits you, the choice of tenant is always yours.
Example financial scenarios
Below is an example of Adam’s affordable rental tax savings:
- Adam owns a 3-bedroom house in O’Connor.
- If Adam decides to rent his property with HomeGround, he may be qualified for the following savings:
| Market Rent @ $600 per week | Affordable Rent @ $445 per week | Difference | |
|---|---|---|---|
| Annual Rent | $31,200 | $23,140 | -$8,060 |
| Land Tax1 | -$12,000 | $0 | $12,000 |
| Tax Savings2 | $0 | $2,980 | $2,980 |
| Net Cash Flow | $19,200 | $26,120 | $6,920 |
|
1 On the assumption that the AUV is $981,000, the Land Tax applicable is approximately $12,000 (See land tax calculator: revenue.act.gov.au/self-assessment-tools-and-forms/calculators/rates-and-land-tax-calculator). 2 On the assumption that the personal marginal tax rate is at 37%, Adam’s tax savings total approximately $8,060 x 37% = $2,980 |
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To read more, head to the ACT Government Land Tax Exemption page.
Important Note
Any reference to tax incentives, deductions, or financial benefits available through participation in affordable rental programs is general in nature and does not constitute financial or tax advice. The amount of tax incentives is dependent on the Land Tax Exemption and personal marginal tax rate. Property owners should seek independent advice from a qualified financial advisor, tax agent, or accountant to fully understand their individual circumstances and eligibility for any benefits, including but not limited to land tax exemptions, depreciation claims, or charitable deductions.
Relevant legislation and tax rulings include:
- Revenue Legislation Amendment Bill 2019
- Land Tax (Affordable Community Housing) Determination 2019
- ATO Class Ruling CR2019/27
Finding the right tenants, not just good tenants.
We don’t just fill vacancies. We match tenant needs with your property type and scheme requirements to find the right fit. That means fewer headaches, longer tenancies, and better outcomes for everyone. Whether your property is listed in our LTE affordable rental scheme or as a full market rate rental, we apply the same high standards to finding the right tenants for your property.
Property management with purpose.
Australia has a rental affordability problem, and Canberra is not immune to it. HomeGround is proud to be part of the solution. When you choose our team to manage your property, you’re helping the local community access quality housing they can actually afford. That’s a return on investment you can feel good about.
How HomeGround can assist you with leasing under the Land Tax Exemption Program
- Through affordable rent setting and tenant eligibility assessments.
- By streamlining paperwork to support your tax claim in accordance with the ATO tax ruling.
- More information for tenants on finding an affordable rental is available at: Help finding an affordable rental – ACT Government
For information relating to your specific financial situation, please speak to a licensed tax accountant, financial planner or the ATO. Any information provided on this website does not consider your individual financial circumstances and is not financial advice.
To determine your current ACT Government Land Tax fess – use the ACT Government Rates and Land Tax Calculator.
Ready to find out what you could save? Let’s talk about your property and how HomeGround can work for you.
We manage your property. You make a difference.
Get started with HomeGround Real Estate Canberra