Some authorities send land tax assessments for different periods of time, including for amounts in arrears.
Clients who earn rental income from their property can claim a deduction for land tax in the income year the liability relates to, not the income year any arrears are paid. Your clients can claim land tax for:
- the current year as a deduction in their tax return
- past years by lodging an amendment for the year the liability relates to.
Land tax deductions don't need to be apportioned in the income year your clients:
- start to use the property as their main residence
- sell the property.
When the property is sold, any adjustments of land tax must be declared as rental income by the vendor.
For more details, refer to the Rental properties guide.