The New South Wales Chief Commissioner of State Revenue has issued a new ruling (LT 097) on the land tax exemption for land used for primary production, signalling an intention to limit availability of the exemption for land on which mining and wind farm activity is commencing. This may apply even at a stage when primary production continues unimpaired but first steps are being taken to use part or all of the land for mining or wind farms.
The same issue can arise for land used to produce solar energy.
For miners or energy producers, the issue may arise to the extent that they own the relevant land. Even where they do not, the additional cost to the farmer may be passed through under a broad enough tax indemnity.
The Chief Commissioner’s attempt to widen the reach of land tax in this way has been a developing trend over the last few years and should be considered when advising on mining and energy projects involving land used for primary production.