Taxes Consolidation Act 1997 section 653AHA

Sites subject to a relevant contract

Section 653AHA provides an exemption from residential zoned land tax (RZLT) for land that is subject to a pre-existing written lease entered into before 1 January 2022 which prevents the owner from developing the site.

• Where a relevant site is subject to a qualifying written lease entered into before 1 January 2022 that precludes the owner from developing the land, the liable person may claim an exemption from RZLT for the duration of the lease, provided annual RZLT returns are filed for each liability date during the lease period.
• A "relevant contract" is a written lease of no more than 35 years, entered into before 1 January 2022, where it is reasonable to consider that the lease prevents the owner from carrying out development on the site or part of it; where the lease only restricts development for part of its term, the exempt period is limited to that restricted period.
• Where only part of a site is subject to the lease, the RZLT payable is reduced proportionately using the formula C = T × (A_part / A_total), where T is the full RZLT that would otherwise be due, A_part is the area not covered by the lease, and A_total is the total site area.
• The exemption does not apply where the parties to the lease include the site owner and a connected person, or where it is reasonable to consider that the lease was not entered into for bona fide commercial reasons and forms part of an arrangement whose main purpose, or one of whose main purposes, is the avoidance of tax.