Apply for a charitable exemption

Apply for an exemption from State taxes for certain charitable bodies, institutions or transactions.
  • A dutiable transaction is exempt from transfer duty if it has been entered into for charitable purposes.
  • Land is exempt from land tax if it is owned by, vested in or held in trust for a public charitable or benevolent institution.
  • Wages paid by charitable bodies are exempt from payroll tax if they are paid in connection with a charitable purpose.

Separate eligibility criteria apply for each tax, and a separate application must be made for each tax liability. Being eligible for an exemption for one tax does not result in an automatic exemption from the other taxes. Select the type of exemption below to access the relevant application form.

See more information in the Charitable Exemptions revenue ruling.

Charitable purposes

Show more

The Commissioner may:

  • grant an exemption from tax for certain charitable bodies
  • exempt a transaction that has been entered into or occurred for a charitable or similar public purpose.

A body will be charitable if its main or dominant purpose is a charitable purpose. For a body or transaction to have a charitable purpose, the purpose must be recognised by common law in Australia as being charitable.

Charitable purposes are divided into four categories, commonly referred to as the four heads of charity.

Heads of charity Examples of charitable purposes
First head
Relief of the aged, impotent and poor
  • providing low cost accommodation to persons in needy circumstances
  • providing health and welfare services
  • caring for the physically disabled or mentally afflicted
Second head
Advancement of education
  • establishing teaching positions or providing student accommodation
  • increasing public appreciation for art, music or literature
  • conducting scientific research
Third head
Advancement of religion
  • the construction of churches and other places of worship
  • providing accommodation, support, aid or relief for clergy, ministers, nuns or teachers of religion
Fourth head
Other purposes beneficial to the community
  • increasing the safety and protection of the community
  • conservation of the environment
  • advocating for animal welfare
  • promotion of trade, industry and commerce, such as an organisation formed for the general improvement of agriculture

The fact that a taxpayer may be recognised as a charity by another agency, such as the Australian Charities and Not-for-profits Commission (ACNC), will not independently satisfy the Commissioner that the taxpayer is a charitable body.

A dutiable transaction is exempt if it has been entered into or occurred for charitable or similar purposes.

A landholder acquisition is exempt from duty where transfer duty would not have been chargeable if the landholder’s land had instead been acquired directly.

A similar public purpose differs from a charitable purpose in that the purpose does not have to be characterised as being ‘charitable’ under common law principles. ‘Similar public purpose’ is generally accepted to mean a purpose of providing some service, utility or benefit to the public that would not otherwise be provided and which is not provided with the primary purpose of producing a profit.

To determine if a dutiable transaction or acquisition was entered into or occurred for a charitable or similar public purpose, the Commissioner will focus on the purposes for which the property was acquired. This means the taxpayer does not necessarily have to be charitable body.

Apply for an exemption. Provide the transaction record (e.g. offer and acceptance contract or transfer of land) with your application.

The exemption does not apply if the person liable to pay duty is a relevant body, or related to a relevant body, unless a beneficial body determination is in force for that relevant body.

Land tax

Show more

Land held by a public charitable or benevolent institution is exempt from land tax if it used solely for the charitable or benevolent purposes for which the institution was established.

Apply for an exemption. A separate application for exemption must be made each time new land is acquired.

A taxpayer is a public charitable or benevolent institution if its main purpose is charitable. To establish this, the Commissioner will consider the taxpayer’s purpose at the time it was established and the taxpayer’s activities on 30 June in the financial year before the assessment year.

To determine if land is used for charitable purposes, the focus is on the use of the land as at 30 June in the financial year before the assessment year. Use of the land for charitable purposes is determined by comparing the charitable purposes of the taxpayer with the actual use of the land. The taxpayer’s intended future use of the land is not relevant. A partial exemption may apply where only part of the land is used solely for the taxpayer’s charitable purposes.

For a land tax assessment year that commences on or after 1 July 2015, a public charitable or benevolent institution does not include a relevant body unless a beneficial body determination is in force for that relevant body.

Payroll tax

Show more

Wages paid by a charitable body or organisation are exempt if they are paid in connection with a charitable purpose for which the body is carried on.

Wages paid by a Public Benevolent Institution (PBI) are exempt from payroll tax. The taxpayer is not required to apply for an exemption but may seek confirmation from the Commissioner that it is exempt as a PBI. The Commissioner will determine if the following requirements are met:

  • its main or principal object is the direct relief of poverty, sickness, suffering, distress, misfortune, destitution or helplessness
  • it is carried on without purpose of private gain for particular persons
  • it is established for the benefit of the general public, or a large section or class of the public and
  • relief is available without discrimination to every member of the public which the organisation aims to benefit.

Apply for an exemption which will commence

  • if the taxpayer has been registered for payroll tax – at the start of the financial year in which the application was made or
  • if the taxpayer has never been registered for payroll tax – at the start of the financial year that is five years before the financial year in which the application was made.

The Commissioner cannot give an exemption to a charitable organisation or organisation that is a relevant body unless a beneficial body determination is in force.

Relevant bodies

Show more

A relevant body cannot receive a charitable exemption from duties, land tax or payroll tax.

A relevant body includes

  • political parties, industrial associations and professional associations
  • a body (other than a political party, industrial association or professional association) that promotes trade, industry or commerce, unless its main purposes are the relief of poverty, advancement of education or advancement of religion
  • a body that
    • is a member of a payroll tax group with a relevant body or
    • is a related body corporate of a relevant body or
    • has a sole or dominant purpose or object to confer a benefit on a relevant body.

An exemption is not available to a taxpayer that is a relevant body unless they have received a beneficial body determination. An application for a beneficial body determination can only be made after the Commissioner has refused to grant an exemption on the sole ground that the taxpayer is a relevant body.

For more information, see the Charitable Exemptions revenue ruling.

Beneficial body determination

Show more

The effect of a beneficial body determination is to reinstate the entitlement to the charitable exemptions.

The Minister for Finance may, with the Treasurer's concurrence, make a beneficial body determination when he considers it is in the public interest to do so.

Apply to the Minister for Finance for a determination that a relevant body is a beneficial body for the purposes of the taxation Acts if

  • the Commissioner has refused to give a charitable exemption on the sole ground that the taxpayer is, or is related to, a relevant body and
  • all objection and review proceedings have been exhausted, discontinued or fully determined, or all objection or review rights have been surrendered by the taxpayer and
  • the application is made within 60 days after the objection or review rights have been finalised or surrendered, as applicable.

A relevant body that is an industrial association or political party cannot make an application.

Page reviewed 28 February 2020
Was this information helpful?