This Act has been repealed and is no longer in force. It is retained for historical reference.
Jurisdiction
Commonwealth
Act Number
22 of 1910
Collection
act
Plain English Summary
8/10 complexity
What this law does
This Act creates and runs a federal land tax based on the unimproved value of land. It defines who is liable, how land is valued for tax purposes, what land is exempt, how returns and assessments are made, the enforcement tools available to the tax authority, and the appeal route for taxpayers.
The tax is charged on the unimproved value of land owned by taxpayers (s10, s11). The unimproved value is the market value of the land without the owner’s improvements (definitions).
For most resident owners the first £5,000 of total unimproved land value is excluded from taxable value; absentees (non-residents) do not get that deduction (s11(2)).
The ownership date for annual liability is taken at noon on 30 June before the financial year (s12).
Who pays and how liability is allocated
The primary legal liability is generally on the owner of the land (see definitions and s25–s39). That includes freehold owners, certain leaseholders, trustees, mortgagees in possession, equitable owners, and corporate arrangements where shareholders are treated as joint owners (s25, s27–s33, s35, s38–s41).
Special allocation rules apply: lessees under leases made after the Act may be treated as owners (s27); covenants shifting tax to lessees are void if the lease was made after the Act (s30); mortgagees in possession become secondary taxpayers while the mortgagor remains primary (s32).
Companies’ land is attributed to shareholders for assessment purposes, and companies with substantially the same shareholders may be combined for liability (s39, s40).
Sourced from the Federal Register of Legislation (legislation.gov.au), CC BY 4.0.
Administrative machinery and powers
A Commissioner of Land Tax administers the Act under ministerial control (s4–s6). The Commissioner may delegate powers (s8), require returns (s15), carry out or use valuations (s17), inspect land and documents (s64), call witnesses and require production of papers (s65), and make assessments on available information even where returns are missing or unsatisfactory (s18, s19).
Assessments may be altered to correct under- or omitted items, subject to notice and appeal where increases create fresh liability (s20–s21). The Commissioner must give notice of an assessment (s24), but omission of notice does not invalidate it (s24(2)).
Returns, evidence and compliance burden
Taxpayers must file full returns annually in the prescribed form and time, listing all land and values (s15). A taxpayer who files a full return may submit simpler supplementary returns in the next two years in specified circumstances (s15(1) proviso).
Returns and documents produced under the Commissioner’s hand are treated as conclusive evidence of assessment (s23), shifting the burden to taxpayers to disprove incorrect entries in many administrative contexts (s16, s23).
The Commissioner can inspect land and require attendance and sworn evidence, and the Regulations may provide for allowances for attendees (s64–s65).
Enforcement and recovery
Land tax becomes a debt to the Crown when due and may be sued for by the Commissioner (s51). Unpaid tax attracts a 10% additional tax if unpaid within 30 days after due date (s50).
Land tax is a first charge on the land until paid, with priority over other encumbrances unless a bona fide purchaser for value made due inquiry (s56). The Commissioner may lodge a certificate for registration to give effect in State registers (s56(2)).
The Commissioner may recover tax from occupiers or lessees in default, and persons who pay on behalf of others may recover the money as a debt (s55, s57). Jointly liable parties may seek contribution (s58).
Where returns understate value by 25% or more and the Commissioner considers the understatement was to evade tax, the Commissioner may apply to the High Court for a declaration allowing the Commonwealth to acquire the land; on a satisfied High Court finding the Governor-General may proclaim vesting and the owner is compensated on an improved-value basis plus 10% (s48).
Criminal offences and penalties
Failure to file returns, refusal to give evidence, or making false returns attracts penalties (s68). Intentional understating of unimproved value is an indictable offence carrying fines and treble tax or forfeiture (s69). General evasion or attempted evasion is also an indictable offence with heavy penalties, including possible forfeiture of the land (s70–s71).
Appeal rights and administrative review
Taxpayers may appeal assessments to the High Court in original jurisdiction, to State Supreme Courts or other prescribed courts within the prescribed time (s44). Appeals do not suspend collection; adjustments are made after resolution (s45–s46).
The Commissioner must report annually to the Treasurer with particulars of breaches or evasions noted (s9).
Official rationale (as stated in the Act) and a practical lens
The Act is framed to levy and secure land tax on unimproved values (s10–s11). Mechanisms provided to achieve that include mandatory returns, valuation powers, inspection and evidence powers, fines and criminal penalties for misstatement, the priority charge on land, and an extreme acquisition-for-undervaluation power to protect revenue (s15–s19, s48, s64–s71).
Costs and incentives surfaced by the Act:
Compliance costs and administrative burden fall on owners, trustees, agents, companies and their public officers because of annual returns, possible valuations, documentary production and appearance before the Commissioner (s15, s64–s65, s61–s62). The Commissioner may require returns from any person (s15(2)).
The Commissioner has broad discretion to assess without returns, to alter assessments (including increasing liability within time limits), to delegate functions, and to rely on State valuations (s8, s17–s21). That concentrates decision-making power in the Commissioner, with appeal available to courts (s44–s46).
Criminal and civil penalties (including treble tax, fines, and forfeiture) create strong incentives to provide accurate returns and to avoid structuring arrangements that would be treated as tax-evasion or value understatement (s69–s71). The acquisition power for significant undervaluation (≥25%) is an enforcement backstop that converts valuation disputes into property-transfer risk (s48).
The Act alters incentives for corporate and trust structuring because company-held land may be treated as held by shareholders and closely related companies may be aggregated for tax (s39–s41). Lease timing matters: leases made after commencement may shift liability to lessees (s27), and post-Act covenants imposing tax liability on lessees are void (s30).
Trade-offs and implementation risks:
The Act relies on administrative valuation and enforcement tools to protect revenue, which requires competent valuation work, cooperation from State registries for charge registration, and robust administrative processes (s17, s56(2), s64–s65). If those systems are weak, collection and accurate assessment are at risk.
The broad discretion to assess and the statutory presumption value documents under the Commissioner’s hand may speed collection and enforcement but also increases the need for accessible and reliable appeal paths and transparent procedures to limit disputes (s18, s20, s23, s44–s46).
Who decides, who pays, and what changes in behaviour
Who decides: the Commissioner (under Ministerial control) exercises valuation, assessment, inspection and enforcement powers; the Governor-General and courts have specified roles in removal or acquisition and in making regulations or rules of appeal (s4, s6, s8, s48, s74, s47).
Who pays: legal owners, trustees acting as owners, lessees in certain cases, mortgagees in possession to the extent of their possession, and shareholders as stipulated for companies (s25, s27, s32–s33, s39).
Behaviour likely affected: taxpayers must file accurate annual returns and maintain documentation; owners may change holding structures, leasing or sale timing to manage taxable exposure; companies must maintain a public officer in Australia and make disclosures (s15, s61). The Act makes undervaluation and evasion legally and practically risky because of fines, treble tax, forfeiture and possible compulsory acquisition (s69–s71, s48).
Implementation and compliance notes
Key administrative levers: annual returns (s15), Commissioner valuations and use of State valuations (s17), evidence and inspection powers (s64–s65), enforcement via courts and registration of charges (s51, s56), and criminal sanctions for deliberate understatement and evasion (s69–s70).
Relief mechanisms: a Board (Commissioner, Treasury Secretary, Comptroller-General of Customs) may release taxpayers in bankruptcy, insolvency or serious hardship (s66). Appeals to courts are available but do not suspend collection (s44–s46, s45).
(References in parentheses are to the section numbers of the Act cited above.)