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Vacant land tax bill passes with amendments

Parliament house
Sarah Kendell
23 October 2019 — 1 minute read

Reforms to tax deductions received for owning vacant land have passed Parliament, but a number of amendments secured prior to the law’s passage through the Senate should ensure fewer SMSFs are caught in the changes, according to a technical expert.

Following a review by the Senate Economics Legislation Committee in August, the Treasury Laws Amendment (2019 Tax Integrity and Other Measures No 1) Bill 2019 was recently passed into law, removing tax deductions claimed from owning vacant land in a number of scenarios from 1 July 2019.

While the original version of the bill restricted the claiming of deductions only to vacant land owners who were carrying on a business either themselves or through a related party, new amendments have extended the availability of deductions to land being used to carry on a business with another entity on arm’s length terms.


Insyt chief executive Darren Wynen said the amendments provided a “welcome relief” to SMSFs who may have been caught under the original bill despite the fact they were legitimately earning an income from vacant land.

“This overcomes many of the concerns identified with the draft measure, such as the deductions being denied for vacant land, such as primary production land, that is rented by a super fund to a related or unrelated party at market rates,” Mr Wynen told SMSF Adviser.

Deductions would also be available for owners of land that was temporarily treated as being vacant due to unusual events such as fire, flood or building defects.

However, partially vacant land with residential premises would still be caught under the new rules, Mr Wynen said.

Vacant land tax bill passes with amendments
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