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In New South Wales (NSW), land tax is governed by the Land Tax Management Act 1956 (NSW) (the Act). Under the Act, some of the relevant exemptions for not for profits include: 

[Charitable bodies] land owned by or in trust for a charitable body [defined as a body carried on solely for charitable or educational purposes and not for pecuniary profit]

[Religious societies] land owned by or in trust for a religious society if the society, however formed or constituted, is carried on solely for religious, charitable or educational purposes, including the support of the aged or infirm clergy or ministers of the society, or their wives or widows or children, and not for pecuniary profit

[Sports clubs] land owned by, or in trust for, any club or body of persons, and used primarily and principally for the purposes of any game or sport and not used for the pecuniary profit of the members of that club or body,  

It is important to note that an application for exemption from land tax will not be accepted if the constitution of the body would allow, upon dissolution of the body, for the distribution of its property to one or more members or former members of the body. Accordingly, it is essential to review your organisation’s Constitution to ensure that there can be no distribution to members if the organisation is wound up or dissolved. Rather, any remaining funds or assets are to be distributed to another non-profit organisation with similar purposes and objectives. 

A charitable body bears the onus to prove to the Chief Commissioner of State Revenue that it satisfies the above criteria. 

If you have any queries in relation to whether your organisation is eligible for a land tax exemption, please do not hesitate to contact our office on (02) 9018 1067. 

Birchgrove Legal is a boutique Sydney law firm that specialises in the not-for-practice sector. Its market-leading practice is at the cutting edge of innovative approaches to serving NFP sector organisations across the spectrum of entity types. Get in touch with one of our authors to discuss your needs further.

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