Land tax and commercial real estate property leases in WA

Learn if land tax applies to your commercial property lease in Western Australia… and if so, how it is calculated.

Learn more about land tax from the department of finance

Hi, Anna Valentine here from Perth Commercial Property. I’ve received quite a few enquiries of late in relation to land tax.

Basically, people have been asking…

“does land tax apply to my commercial property lease and if so, how is it calculated”?

Firstly, it is very common practice for land tax to be included in the outgoings of both a standard commercial property lease and that of a retail lease.

Secondly, in terms of its application, it is common practice for a tenant to be charged land tax on a single ownership basis. This means, as an owner, if you are on-charging your tenant, you would ensure that the land tax applies only to that property and not because of a combination of a couple of properties that are owned by that entity or individual.

For example, if on its own your property would not attract land tax on its own, but the fact that you own multiple properties under the same entity brings it into the category of attracting land tax you would not then on-charge your tenant for this.

Further, if the fact you own multiple properties increases the rate of land tax payable due to the way land tax is aggregated, the additional amount of land tax payable over and above the rate the asset would attract if held as a single property, would not recovered from the tenant.

In order to help you calculate land tax in a single ownership basis, the government of WA Department of Finance provides an online calculator whereby you can input the assessed value of a specific property for a particular year and it will tell you if on a stand-alone basis there is any land tax assessable.

You’ll find the link at the end of this article.

Click here to go the the Department of Finance land tax calculator