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Landlord Charging Inflated Land Tax?

Discussion in 'Commercial Law Forum' started by John Langdon, 3 March 2015.

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  1. John Langdon

    John Langdon Member

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    I have a lease with a man than owns several properties and is charging an inflated Land Tax amount in the outgoings. My understanding was that the amount is based on a stand alone, unimproved valuation of the land. He says because he owns several other factories, and he incurs much higher costs that he can pass those on to me. I am talking many times the cost for the premises that I am in. Can he do this?
     
  2. Rod

    Rod Well-Known Member

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    Does the lease allow for land tax in the outgoings?
     
  3. John Langdon

    John Langdon Member

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    Yes it is listed in the outgoings.
     
  4. Rod

    Rod Well-Known Member

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    Is there any explanation as to how the land tax is calculated or does it just show land tax as a list item?
     
  5. John Langdon

    John Langdon Member

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    Just shows it as a listed item with council rates etc. I can't seem to find a definitive answer anywhere.
     
  6. Rod

    Rod Well-Known Member

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    OK. He can only charge you for the portion of land tax attributable to the property you lease. You would need to see the Revenue Office valuation certificate/letter to know how much tax he pays on the property you are leasing. Suspect you are within your rights to verify the portion you should be paying. Ask your landlord to provide proof.
     
  7. Ian Macleod

    Ian Macleod Well-Known Member

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    I would also confirm that you are required to pay land tax as in many states (particularly if this is a retail lease) it is in conflict with the retail leases act to charge a tenant land tax. Which state are you in and what do you use the premises for?
     
  8. John Langdon

    John Langdon Member

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    WA it is a factory (Industrial not retail)
     
  9. Ian Macleod

    Ian Macleod Well-Known Member

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    COMMERCIAL TENANCY (RETAIL SHOPS) AGREEMENTS ACT 1985 - SECT 12 (3)
    notional land tax means land tax and metropolitan region improvement tax calculated on the basis that the land on which the tax is assessed is the only land of which the landlord is the owner within the meaning of that term in the Land Tax Assessment Act 2002 ;
     
  10. Ash

    Ash Well-Known Member

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    State Revenue (department of finance) issue the land tax bills using the following rates using the aggregate value of the land:

    0 300,000 nil
    300,000-1,000,000. 0.11 cent for each $1 in excess of $300,000
    1,000,000-2,200,000. $770 + 0.58 cent for each $1 in excess of $1,000,000
    2,200,000-5,500,000. $7,730 + 1.51 cents for each $1 in excess of $2,200,000
    5,500,000-11,000,000. $57,560 + 1.80 cents for each $1 in excess of $5,500,000
    11,000,000and upwards. $156,560 + 2.67 cents for each $1 in excess of $11,000,000

    Land Tax Rates

    If all the properties add up to less than $1m then it shouldn't be an issue. it is when it goes higher which property does the landlord charge the 58c / $1 ? I don't have an answer. Maybe someone here does or you could try State Revenue (not sure they could help with your query on how much is charged) but may give you info on the value of the property your leasing?
     

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