Unbeknown to many commercial fishing licence and quota holders, there are a range of state tax concessions and exemptions applicable to the commercial fishing industry in Victoria. The applicable Stamp Duty and Land Tax exemptions are often over looked by commercial fishing licence holders as they relate to ‘primary production land’. However, many people seem to overlook the fact that primary production land includes land used in connection with commercial fishing.
What is Primary Production Land?
The definition of Primary Production Land under both the Land Tax Act 2005 (Vic) and Duties Act 2000 (Vic), includes land that is used in connection with commercial fishing, including the preparation for commercial fishing or the storage or preservation of fish or fishing gear.
Although most commercial fishing operations occur on open waters, the definition encompasses land used by commercial fishing enterprises for preparation (eg workshops) as well as any land that is used by commercial fishing enterprises to store their boats and/or associated equipment.
Am I exempt from Land Tax?
The Land Tax Act 2005 (Vic) provides an exemption from Land Tax to land that is used ‘primarily for primary production’. Consequently, this exemption shall apply to land used for commercial fishing, including the preparation for commercial fishing or the storage or preservation of fish or fishing gear.
However, it is important to note that the specific primary production use, ie commercial fishing, must be the dominant and most substantial use of the land. It is possible to have land which is used for multiple purposes fall under the exemption, however Primary Production needs to be the most substantial use of the land.
If you are unsure whether or not your land use meets the requirements to obtain the Primary Production Land Tax exemption, a member of our Agribusiness Team can assist you.
Am I exempt from Stamp Duty?
Stamp Duty is payable upon the transfer of ‘dutiable property’. Dutiable property includes Land (both vacant and developed), livestock and motor vehicles. For commercial fishing enterprises, Stamp Duty exemptions are available on certain transfers of Land as well as the acquisition of ‘commercial vehicles’.
In order to qualify for these exemptions you must be able to prove:-
- a ‘familial link’ between the transferor and transferee; and
- evidence that the land being transferred was used primarily for commercial fishing (which can include preparatory activities for commercial fishing or the storage or preservation of fish or fishing gear).
What if I use my land for other purposes?
As outlined above, an underlying requirement for both Stamp Duty and Land Tax exemptions is whether or not the land is used ‘primarily for primary production’. However, with regards to Land Tax, it is possible to exempt part of your land under the Primary Production Exemption where a specific parcel is used primarily for primary production.
For commercial fishing enterprises who have a storage shed on their residential property used to store their vessel or other equipment, it is possible to have the specific storage area exempt from Land Tax. This means that regular Land Tax is payable on the remainder of the property however the specific area used for commercial fishing is excluded from the area of the property valued for Land Tax purposes.
How do I claim the Stamp Duty or Land Tax exemption?
Stamp Duty exemptions are claimed at the point in which the land or goods are transferred. It is therefore crucial that primary producers, including commercial fishing licence and quota holders, obtain specialist advice and assistance with transferring any property used in conjunction with their commercial fishing business to ensure that any applicable exemptions are claimed.
Land Tax exemptions are not automatically applied by the State Revenue Office. It is therefore up to the land holder to apply for the exemption. It is important that primary producers, including commercial fishing licence holders, obtain proper legal advice when applying for the exemption so as to ensure that all of the relevant evidentiary criteria can be satisfied.
What if I did not apply for a Stamp Duty concession or exemption?
If you have overpaid duty on your purchase because you did not claim an exemption, concession or reduction you were eligible for, you can apply for a Reassessment up to five (5) years after the duty was paid.
Can I get a tax refund if I have paid Land Tax previously that should have been exempt?
If you have paid the full amount of Land Tax and believe that you should have been entitled to one of the exemptions, it is possible to lodge an objection.
What is the time frame for an objection?
Under the Taxation Administration Act 1997, objections against both Land Tax and Stamp Duty must be lodged within 60 days of the date you receive the relevant tax assessment notice.
In most instances, successful objections result in a tax credit being added to the customer’s account. However, it is possible under certain circumstances to receive a tax refund.
How can Coulter Roache help?
Coulter Roache can assist commercial fishing licence holders, quota holders and fish processors with any Victorian tax related advice or issues We can also assist our clients in applying for exemptions or lodging objections against Land Tax Assessment Notices and Stamp Duty Assessment notices.