Through new laws late in 2021 and expanded interpretation, Daniel Andrews is imposing a new tax on charities (including churches), Labor’s 43rd new or expanded tax since coming to office in 2014.
The bill that went through Parliament late in 2021, the Windfall Gains Tax and State Taxation and Other Acts Further Amendment Bill 2021, was opposed by the Liberals and Nationals but supported by key Labor voting independents including Fiona Patten, Samantha Ratnam, Andy Meddick and Clifford Hayes.
With the passage of the Bill, the State Revenue Office has issued LTA-009 – Land Tax – Charity Exemption, narrowing the Land Tax exemption for charitable institutions by harshly insisting that charitable institutions “exclusively” use their land for charitable purposes.
Daniel Andrews’ scrooge like interpretation means that where a fee is paid it may well be regarded as a commercial transaction and Land Tax will therefore be levied under the new rules on the entire landholding.
For most charities, an unexpected land tax liability would be crippling. Nevertheless, the following real-world examples have actually happened:
- One church was assessed for land tax on the basis that it allowed its church hall to be used for weekly meetings of a Weight Watchers group and a Historical Society.
- Another church was assessed for land tax on its church hall as a result of use of its hall by a children’s playgroup and ad-hoc hire by individuals and a community group.
- Another church was levied with land tax due to a solitary hire of a meeting space to a non-charity during the relevant year.
Many churches desire that their buildings be available to serve their community but are currently held back for fear of inadvertently triggering land tax liability. This is to the detriment of local communities who have traditionally relied upon use of church facilities for important social connection such as playgroups, health and wellbeing classes and community functions.
It is notable that New South Wales, South Australia and Queensland have implemented land tax exemptions for charitable organisations based on the primary use or the nature of the owner.
In NSW, land owned by a charity is exempt – use is irrelevant for these purposes.
Queensland and South Australia both grant exemption if the “predominant use” is for charitable purposes. This allows for secondary uses, including uses which are unconnected with the predominant charitable use, to proceed without impacting the land tax exemption.
Daniel Andrews and Labor however, insist “Land is used and occupied by a charitable institution (charity) exclusively for charitable purposes”. The Treasurer Tim Pallas has written back to a number of churches and charities that had communicated with him, indicating the matter was “under review”. This is an admission that the new tax is flawed.
Labor’s new tax on charities is nasty, it is harsh, it is wrong and only a Matt Guy Liberals and Nationals government will reverse it.
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