A caravan park is one of the few asset classes in Australia where the same piece of dirt can be run as tourist accommodation, as permanent housing, or as both at once, under three different bodies of law depending on which you pick. That is the whole story of the category. The land is usually cheap relative to what sits around it, often coastal or riverside, often held by a family for thirty years, and often carrying a site layout designed for 1970s caravans rather than a modern cabin. The upside sits in the gap between what the land currently earns and what it could earn. The risk sits in the fact that the people living there have statutory rights that survive the settlement.
Before buying, converting or redeveloping a park, you will need professional advice from a property lawyer and an accountant, and generally a town planner as well. The reason is specific rather than general. If a park has long-term occupants, you inherit their agreements and the notice regimes attached to them, and in several states a termination notice served on the wrong ground, or before the right approval is in hand, is simply void. If the park trades, the Goods and Services Tax (GST) treatment of the accommodation and site rent is not the same as an ordinary residential lease, and getting it wrong across a hundred and fifty sites compounds quietly. Your lawyer reads the site agreements and the existing use position, your accountant sets the GST and land tax treatment, and your planner tells you what the consent authority will actually approve. This guide is written so you can have those conversations with the right questions already framed, not so you can skip them.
Figures, thresholds and section numbers here were current at the date of writing and move regularly, particularly in Queensland where a staged reform programme has been rolling out since 2024. Each point links to the legislation or the regulator, and that is where to confirm the current position before it touches your feasibility.
What is a caravan park or holiday park development?
A caravan park development is the creation, expansion or repositioning of a site licensed to accommodate caravans, cabins, tents or relocatable homes, earning income per site rather than per square metre of building. That framing matters because it changes almost every input in a feasibility. Your revenue is a function of site count, site rate and occupancy. Your capital cost is heavily weighted to civil works, effluent, power and roads rather than to a single building. And your exit is usually a capitalised income valuation on a trading business, not a sum of individual sales.
Developers tend to come at the category from one of four directions: a value-add acquisition that replaces ageing sites with cabins and lifts the rate, a greenfield park in a tourism corridor where accommodation supply is constrained, a conversion of tourist sites to permanent residential occupation under land lease legislation, or the reverse, buying a park for its underlying land and closing it. That last one is the highest-risk version and the one where tenancy legislation bites hardest.
Whichever direction you come from, the first question is the one you would ask on any site, which is whether the current use is anywhere near the highest and best use of the land. Parks frequently sit on land that would support something denser. That does not mean the consent authority will let you build it, and in several states it does not mean you can clear the site even if it would.
What is the difference between a tourist park, a residential park and a land lease community?
The difference is the length of stay and the legal status of the occupant, and it drives the planning pathway, the tenancy regime, the tax treatment and the valuation method.
A tourist or holiday park accommodates short-stay guests. Occupants are usually travellers, the operator supplies the cabin or the guest brings a van, and no residential tenancy attaches. Income is nightly, seasonal and sensitive to weather, fuel prices and school holidays.
A residential park, sometimes called a long-stay park, accommodates people whose site is their principal place of residence. The occupant may rent a dwelling from the operator or may own a relocatable home sitting on rented land. Once the stay crosses a statutory threshold, a specific state Act applies and the occupant acquires rights that a nightly guest does not have.
A land lease community, also called a manufactured home estate or a residential land lease community depending on the state, is the purpose-built version. Residents buy the home and lease the land under a site agreement, paying ongoing site fees. The operator retains the freehold and the income stream. In New South Wales this is governed by the Residential (Land Lease) Communities Act 2013, in Queensland by the Manufactured Homes (Residential Parks) Act 2003, in South Australia by the Residential Parks Act 2007, in Western Australia by the Residential Parks (Long-stay Tenants) Act 2006, and in Victoria by Part 4A of the Residential Tenancies Act 1997.
Many real parks are hybrids, running a short-stay area alongside a long-term area, and that hybrid is where most of the compliance risk lives. In New South Wales a caravan park can hold both, but the number of long-term sites is fixed by a condition on your development consent, covered below. In Victoria a park can contain ordinary caravan park sites and Part 4A sites governed by an entirely separate regime, with different notice periods on each.
One structural point is worth carrying into every model. In Victoria, section 206C of the Residential Tenancies Act 1997 provides that a Part 4A dwelling is not a fixture. The home is the resident’s chattel sitting on your land. That is the defining feature of the land lease model, and it is why the income is site rent rather than residential rent, why the resident sells the home rather than surrendering a lease, and why closing a park means dealing with someone else’s building on your ground.
Why does a caravan park always need two approvals?
Because planning consent and the right to operate are separate instruments issued under separate Acts, and holding one does not give you the other.
The first is the planning approval: development consent, a planning permit, or a material change of use approval, depending on the state. This tells you whether a park is permissible on the zoning at all, how many sites the consent authority will approve, and what conditions attach.
The second is the operating approval: an activity approval, a registration or a licence, usually issued by the council, usually renewed annually, and usually conditional on prescribed standards for fire safety, sanitation, separation distances and roads. This is the approval that lets you open the gate.
So a park can be fully approved in planning terms and still be unable to trade. Developers who model a park like a subdivision, where approval is a one-off event, tend to miss this. The operating licence is a permanent overhead, and in most states it can be varied, refused on renewal, or made conditional on works.
A third layer appears where the park will hold permanent residents. That layer is the state tenancy or land lease legislation, and it is not an approval at all. It attaches automatically the moment an occupant crosses the statutory threshold, whether or not anyone applied for anything.
What does New South Wales require for a caravan park or manufactured home estate?
New South Wales is generally the most prescriptive jurisdiction in the country on park development, and also the most useful to read first because the numbers are published and specific.
Planning permissibility. Caravan parks sit in Chapter 3, Part 9 of State Environmental Planning Policy (Housing) 2021, beginning at section 129. Manufactured home estates sit in Chapter 3, Part 8. Section 129 defines a caravan park as land, including a camping ground, on which caravans or other moveable dwellings are or are to be installed or placed, but excludes farm stay accommodation.
The long-term site condition. For a New South Wales developer this is generally the provision that matters most. Under section 131 of the State Environmental Planning Policy (Housing) 2021, before granting consent the council must determine the number of sites suitable for long-term residence and the number suitable only for short-term residence, and section 131(3) provides that the council “must not grant development consent… unless it imposes as a condition of that consent a condition specifying the maximum number of sites (if any) within that land that may be used for long-term residence”. Your permanent site count is therefore a consent condition, not a commercial decision you make after settlement. If your model assumes converting short-stay sites to long-term income, that assumption is a modification application, with everything that implies for time and cost. Section 131(4) reinforces it: the holder of an operating approval must not, without development consent, allow a site to be occupied for a continuous period of more than three months where that use was not lawful when the Part commenced.
Operating approval. Section 68 of the Local Government Act 1993 requires prior council approval for activities in a prescribed table. Part F item 2 covers operating a caravan park or camping ground, Part F item 3 covers operating a manufactured home estate, and Part A item 1 covers installing a manufactured home, moveable dwelling or associated structure on land. The estate approval and the installation approval are distinct.
Development standards. The Local Government (Manufactured Home Estates, Caravan Parks, Camping Grounds and Moveable Dwellings) Regulation 2021 sets the numbers, and they are the ones to build a yield test on.
For caravan parks and camping grounds:
- Section 83: a caravan park must be at least 1 hectare, unless a lesser area is permitted by an environmental planning instrument. A camping ground has no minimum area.
- Section 84: at least 10 per cent of the total land area reserved for recreation or communal activities, which a council may reduce to no less than 6 per cent.
- Section 85: a long-term site must be at least 80 square metres, a short-term site at least 65 square metres, and a camp site at least 40 square metres where separate parking is provided within 30 metres, otherwise at least 50 square metres.
- Section 89: setbacks of 10 metres from a public road and 3 metres from any other boundary.
- Section 91: a moveable dwelling must not be installed within 3 metres of another on a long-term site, or 2.5 metres on a short-term or camp site.
- Sections 92 to 94: entrance and exit road at least 7 metres wide, forecourt at least 4 metres by 20 metres, access roads at least 6 metres two-way and 4 metres one-way.
- Section 111: a long-term site must be within 75 metres of a shower or toilet block, and a short-term or camp site within 100 metres, measured in a straight line, unless the site is self-contained or has an ensuite.
For manufactured home estates:
- Section 12: at least 1 hectare, subject to the same environmental planning instrument carve-out.
- Section 13: at least 10 per cent of the total land area reserved for recreation or communal activities, which a council may reduce to no less than 6 per cent.
- Section 14: a dwelling site must have an area of at least 130 square metres.
- Section 43: no more than one manufactured home per dwelling site. There is no dwellings-per-hectare figure in the Regulation.
- Section 45: floor area not more than 65 per cent of the site area, with 18 square metres deemed added where there is no carport or garage.
- Section 46: at least 30 square metres of open space on the dwelling site, including at least one area with a minimum dimension of 3 metres.
- Section 53: enclosed floor area of a manufactured home at least 35 square metres.
Note the step from 80 square metres for a caravan park long-term site to 130 square metres for a manufactured home estate dwelling site. Before communal area and roads, that is roughly a 38 per cent reduction in raw site count for the same land. A conversion that reads as a simple upgrade on paper may mean fewer sites at a higher rate, and the model has to carry both movements at once.
A worked site yield test
Take a 2.5 hectare parcel in New South Wales, 25,000 square metres gross, being tested as a long-term caravan park.
- Communal area at the section 84 minimum of 10 per cent: 2,500 square metres
- Internal roads, entrance road, forecourt, visitor parking and amenities buildings: 6,000 square metres
- Perimeter setbacks under section 89 not usable for sites: 2,000 square metres
- Remaining area available for sites: 25,000 − 2,500 − 6,000 − 2,000 = 14,500 square metres
At an average 90 square metres per site, which sits above the 80 square metre minimum in section 85 to absorb the 3 metre separation required by section 91, that gives 14,500 ÷ 90 = 161 sites.
Run the same parcel as a manufactured home estate and the arithmetic changes. Communal area at 10 per cent is again 2,500 square metres. Roads and amenities with the wider road reserves in sections 20 and 21 might take 7,000 square metres, and setbacks under section 18 another 2,500 square metres, leaving 13,000 square metres. At 150 square metres average, above the 130 square metre minimum in section 14 to allow for internal spacing, that gives roughly 86 dwelling sites. Same land, 75 fewer sites, a different product. Which one works depends on the rate each can achieve in that location, and that is a question for a local valuer.
How does Victoria register and regulate a caravan park?
Victoria regulates parks through Part 14 of the Residential Tenancies Act 1997 and the Residential Tenancies (Caravan Parks and Movable Dwellings Registration and Standards) Regulations 2024, which came into force on 29 June 2024. Registration sits with the council of the municipal district in which the park is situated.
One requirement is worth planning around early. Planning Victoria states that “all caravan parks must have a fire safety report issued by a fire authority” and that “the caravan park owner must include this report in an application for registration or renewal of registration of a caravan park as specified in the Regulations”. The Country Fire Authority publishes the guidelines fire authorities use when preparing those reports, and the Planning Victoria caravan parks and movable dwellings page is the current source. On a bushfire-exposed regional site, that report is a gate on your ability to trade, not a formality at the end.
A useful negative finding for anyone benchmarking Victoria against New South Wales: the 2024 Regulations do not set a minimum site area, a density figure in sites per hectare, or a cap on the proportion of long-term sites. Part 3 covers fire and emergency management, amenities, and standards for movable dwellings and annexes. Separation is dealt with through the fire safety and access provisions and through section 518C of the Act rather than through a prescribed site geometry. That pushes more of the yield question onto the planning permit and the fire authority than onto a published table, which makes early pre-application engagement more valuable in Victoria than it is in New South Wales.
On the residential side, Consumer Affairs Victoria states that where a park first registered with the council after 1 September 2011, the site agreement must allow occupation for at least five years, and that from 1 July 2026 the standard form Part 4A site agreement is mandatory. Site tenants have 20 days to consider an agreement and cannot be asked to sign until the 21st day, with five business days of cooling off after that. The Consumer Affairs Victoria page for site owners is the current reference.
What changed in Queensland under the 2024 manufactured homes reforms?
Queensland has been running the most active reform programme in the country, and several of the changes go directly to how a residential park’s income can be modelled.
The Manufactured Homes (Residential Parks) Amendment Act 2024 received assent on 6 June 2024. The staged commencements, as published by the Queensland Department of Housing, include the following.
From assent, 6 June 2024. Annual site rent increases are capped at the greater of the Consumer Price Index or 3.5 per cent, applying to current and future home owners. Market rent reviews are prohibited and existing market rent review clauses in site agreements are voided, with a fallback to any alternative basis in the agreement and otherwise to the Consumer Price Index. A buyback and site rent reduction scheme was introduced, under which an eligible home owner who opts in receives a 25 per cent site rent reduction six months after opting in, and the park owner must buy the home twelve months after the owner joins.
From 6 December 2024. Park owners must offer at least three approved ways to pay site rent, including at least one that is fee free, for new site agreements.
From 20 February 2025. Park comparison document requirements and strengthened registration obligations commenced. Under section 18P of the Act it is an offence to operate an unregistered residential park, carrying a maximum penalty of 540 penalty units.
From 6 December 2025. Buyers must enter a new site agreement rather than take an assignment, except for family transfers. Rent increases must use one of a set of prescribed bases, being the Consumer Price Index, a stated percentage, a stated dollar amount, an apportioned rates increase, the greater of any two, the lesser of any two, or the sum of any two, all still subject to the overall ceiling. Precontractual disclosure was simplified, with the disclosure period under section 29 set at 21 days before entering a site agreement, reducible to seven days by a lawyer-signed waiver under section 30.
From 7 June 2026. Sale agreements must use the approved form. Park owners must prepare maintenance and capital replacement plans, with interim plans covering the period from 7 June 2026 to 31 December 2027 and ordinary plans running at least 10 years, developed in consultation with home owners. Parks with 15 or fewer manufactured home sites are exempt, as are some mixed-use parks where manufactured homes make up less than 30 per cent of relevant sites. A park that stops being exempt, for example because its site count rises to 16 or more, generally has 12 months to prepare a plan.
The modelling consequence of the rent cap is the one to sit with. A Queensland residential park’s site income now escalates on a formula with a hard ceiling, removing the ability to reset to market on renewal. That makes the acquisition rate, not the future rate, the thing that determines the outcome. It also turns the capital replacement plan into a forecastable line item rather than a discretionary maintenance allowance.
On approvals, a Queensland park generally needs both a development approval for a material change of use under the relevant planning scheme and a separate local law permit to operate. Brisbane City Council, for example, requires a permit under its Caravan Parks and Relocatable Home Parks Local Law to use land for accommodation in cabins, caravans, relocatable homes or readily assembled structures, renewable every 12 months, and states plainly that separate planning approval may also be needed. Local law requirements vary by council, and the specific local law is worth pulling before you price anything.
How does Western Australia license a caravan park?
Western Australia licenses parks through local government under the Caravan Parks and Camping Grounds Act 1995, with section 6 making it an offence to operate a caravan park or camping ground without a licence. Under regulation 52 of the Caravan Parks and Camping Grounds Regulations 1997, the prescribed licence period is one year from the day the licence was granted or renewed. Regulation 55 requires prior written local government approval to transfer a licence, which is a settlement condition worth flagging on any acquisition.
The Western Australian standards work differently from the New South Wales ones. Rather than a minimum site area, the Regulations control yield through licence conditions, separation and facility ratios.
- Regulation 50: the local government must endorse on the licence the maximum number of sites, the maximum number in any overflow area, and the maximum number of each site type.
- Regulation 51: the maximum number of camping sites endorsed must not exceed one site per 25 square metres of camping ground, or one site per 50 square metres for a nature based park.
- Schedule 7 clause 8: at least 3 metres between a caravan, annexe or camp and one on any other site, at least 1 metre to any facility road, and at least 6 metres to land reserved for a road.
- Schedule 7 clause 15: entrance road at least 6 metres wide, one-way road at least 4 metres, two-way road at least 6 metres.
- Schedule 7 clause 18: recreational area of at least one tenth of the total facility area, with two thirds of it in one area unless the local government approves otherwise.
- Schedule 7 clause 19: at least one toilet and one shower within 90 metres of each site, with the clause 20 ratio table scaling from one pedestal and one shower per sex for 1 to 10 sites, up to 12 pedestals plus one per 25 additional sites above 200.
The regulation 51 density figure reads as generous and in practice rarely binds. The separation distances in clause 8, the ablution ratios in clause 20 and the recreational area requirement in clause 18 will constrain a real layout long before you approach one site per 25 square metres. Regulation 51 works as a licence ceiling rather than a yield target.
There is also a trap in Schedule 7 clause 11(3). A residential building in a Western Australian park, other than the manager’s house, may not be occupied by the same person or group for an aggregate period of more than six months in any consecutive 12 months. If your model assumes permanent occupation of cabins you own, that clause needs reading against your product before it goes into a cashflow.
The Western Australian Government has released a consultation paper on legislation to replace the 1995 Act. No bill had been introduced at the date of writing, so there is no timetable to plan against.
What applies in South Australia, Tasmania, the Northern Territory and the ACT?
South Australia. The Residential Parks Act 2007 applies where the park is the resident’s principal place of residence. Section 5(4) presumes that an arrangement to stay 60 days or more is not a holiday and is the person’s principal place of residence, and sections 5(5) and 5(6) prevent an operator defeating the Act by stringing together shorter agreements. That 60-day line is the practical trigger to design around in a South Australian tourist park. Rent increases under section 21 require written notice, may only occur 12 months after the agreement started or 12 months after the last increase, and need 60 days of notice. The Legal Services Commission of South Australia Law Handbook sets the sections out in accessible form. Development is assessed under the Planning, Development and Infrastructure Act 2016 against the Planning and Design Code.
Tasmania. There is currently no park-specific tenancy legislation in force. The Residential Tenancy Act 1997 contains no reference to caravans or caravan parks, and section 6(2)(b) provides that the Act does not apply to premises ordinarily used for holiday purposes. That gap is being closed. The Residential Parks Bill 2026 passed the House of Assembly on 24 March 2026 and the Parliament’s bill status record shows Legislative Council amendments agreed, with no Royal Assent date recorded at the date of writing. Commencement is on proclamation. Anyone underwriting a Tasmanian park with long-stay residents should be reading the Bill as passed rather than the current Act, because the position is likely to change inside a normal due diligence and delivery timeline. Planning approval is under the Land Use Planning and Approvals Act 1993 and the Tasmanian Planning Scheme.
Northern Territory. The Territory has a standalone Caravan Parks Act 2012, which commenced on 1 May 2012. Northern Territory Consumer Affairs states that where the caravan park is also a resort, tourist or holiday park the Act does not apply, with the exception of residents who have lived in the park for five years or more. That five-year carve-out is the one to check on any Northern Territory acquisition, because it can convert what looks like a purely tourist asset into one carrying protected occupants. Planning approval is under the Planning Act 1999 and the NT Planning Scheme 2020.
Australian Capital Territory. There is no caravan park statute. Occupancy sits under the Residential Tenancies Act 1997 (ACT), with Part 5A covering occupancy agreements and Part 5B covering residential parks, including shared facilities, assignment of interests and the sale of manufactured and mobile homes on a park site. Section 71EA(4) matters for a site-lease model: for a site-only residential park occupancy agreement, the premises are the land and any fixtures provided by the grantor for the purpose of the occupant placing a manufactured home or mobile home on the land, and the grantor may enter the occupant’s home only with reasonable notice, at reasonable times, on reasonable grounds and for reasonable purposes. Disputes go to the ACT Civil and Administrative Tribunal. Planning approval is under the Planning Act 2023 and the Territory Plan 2023.
What happens to the people already living in a park you want to redevelop?
This is where park deals are won and lost, and it is the part most often underestimated at acquisition. The common thread across states is that closing a park or changing its use is a defined statutory ground with its own notice period, and in several states you must have the replacement approval in hand before you can serve the notice at all.
New South Wales. Section 124 of the Residential (Land Lease) Communities Act 2013 sets the closure ground, being that the community is to be closed and used for a purpose other than a residential community. Section 124(2) provides that where the new use requires development consent, “the termination notice must not be given unless development consent for the proposed use has been obtained”. Section 124(3) requires at least seven days of notice to the Commissioner before giving the notice, with a maximum penalty of 50 penalty units. Section 124(5) provides that the vacating date must not be earlier than 12 months after the notice, or the day after a fixed term ends, whichever is later. Section 124(6) lets a home owner apply to the Tribunal within 90 days for a postponement. Section 124(7) requires the operator, unless told otherwise in writing, to use reasonable endeavours to obtain alternative accommodation of approximately the same standard and no greater financial outlay, acceptable to the home owner, and section 124(8) requires the Tribunal to take those endeavours into account. Compensation provisions sit in Part 11 Division 6, and NSW Fair Trading sets out what is payable and the itemised relocation costs.
That sequence reads as a programme. Consent first, then a seven-day regulator notice, then a 12-month minimum notice to residents, then a possible 90-day postponement application on top. Twelve months is the floor, not the expectation.
Victoria. Consumer Affairs Victoria states that closure requires at least six months of notice for caravan park residents and at least 365 days for Part 4A site tenants, and that where a fixed-term agreement is on foot the end date must not be before the end of that agreement. Then there is section 215A, which is the provision to build into the programme. The owner must apply to the Victorian Civil and Administrative Tribunal within 30 days of serving the notice to vacate for a compensation determination, and under section 215A(4) and (5), if the owner does not, the notice to vacate is void and of no effect. A 30-day administrative step that voids a 365-day notice is exactly the kind of thing that gets missed when the notices are served by a property manager rather than a lawyer. The Consumer Affairs Victoria closure page is the current reference.
Western Australia. Section 41A of the Residential Parks (Long-stay Tenants) Act 2006 covers closure or change of use, and section 41A(2) provides that where development approval under the Planning and Development Act 2005 is required, the operator may terminate only if that approval has been granted. Section 41A(3) requires written notice to the Commissioner at least seven days before giving notice to the tenant. Section 41C covers a change of use of an individual site on the same approval precondition. Section 41D(2) sets the notice periods at at least 180 days for a site-only agreement and at least 60 days for an on-site home agreement, and where the agreement is for a fixed term, not earlier than the last day of that term.
There is an asymmetry in Western Australia worth understanding before you price a park. Compensation under section 46 is payable to a fixed-term tenant for terminations under section 41 (sale of the park requiring vacant possession), section 45 (frustration) or a section 73 hardship order. Terminations under sections 41A to 41C are not in that list. The amount, where payable, is determined by the State Administrative Tribunal under section 65.
South Australia. Under section 70A of the Residential Parks Act 2007, a park owner terminating a site agreement to allow a change of use or development is required to give 365 days of notice, and must first offer to relocate the resident to another site, purchase the resident’s dwelling, or relocate the dwelling. A resident who receives such a notice may terminate on 28 days under section 78A. Compensation is not automatic. The South Australian Civil and Administrative Tribunal may order compensation for loss or inconvenience arising from early termination.
Queensland. The route runs through the tribunal rather than a notice period. A park owner who wants to use the land for another purpose may apply to the Queensland Civil and Administrative Tribunal (QCAT) for a termination order. The tribunal may postpone the termination date by up to a year after the order, and in making the order it will generally order the park owner to pay compensation, taking the estimated cost of removing the home into account. For a model, the consequence is that both the timing and the compensation are set by a tribunal rather than known at acquisition.
The Northern Territory and the ACT. Each has its own regime, worth pulling in full at due diligence rather than assumed from the pattern above.
The general lesson for a feasibility is that the holding cost between exchange and vacant possession is a long line item on a park with permanent residents, and it sits on top of the approval timeline rather than running alongside it. The sequence is often approval, then notice, then wait, then works. Building that as sequential blocks rather than overlapping ones changes the internal rate of return materially, and it is worth testing in a monthly development cashflow rather than an annual one, because the notice periods do not land on financial year boundaries.
How is Goods and Services Tax (GST) applied to park accommodation and site rent?
Park income is generally taxable rather than input taxed, which is the opposite of the position for ordinary residential rent, and that difference is worth confirming with your accountant before it goes into a model.
The starting point is the definition of “commercial residential premises” in section 195-1 of the A New Tax System (Goods and Services Tax) Act 1999, which expressly includes “a caravan park or a camping ground”, and also captures “anything similar to residential premises described in” the preceding paragraphs.
That “anything similar” limb is what brings land lease communities in. The Australian Taxation Office (ATO) ruling GSTR 2012/6 states at paragraph 110A that “‘Home parks’ in which sites for moveable homes are rented and the homes themselves either rented or occupied by their owners are commercial residential premises under paragraph (f) of the definition, as they are similar to caravan parks”. Read with paragraph 111 of the same ruling, the effect is that accommodation supplied in a park by the entity that owns or controls it is not input taxed under paragraph 40-35(1)(a), and is taxable where section 9-5 is satisfied.
Division 87 then provides a concession for long-term stays. Under section 87-20(1), long-term accommodation is provided where commercial accommodation is provided for a continuous period of 28 days or more in the same premises. Under section 87-20(3), premises are “predominantly for long-term accommodation” if at least 70 per cent of the individuals provided with commercial accommodation in the premises are provided with it as long-term accommodation. Where that 70 per cent test is met, section 87-5 sets the value of the taxable supply at 50 per cent of what the price would otherwise be. Where it is not met, section 87-10 applies the ordinary value to the first 27 days and 50 per cent of the price to the part of the supply after the first 27 days.
Section 87-25 lets a supplier choose not to apply Division 87 at all, in which case long-term accommodation supplies become input taxed under section 40-35. That choice covers all the supplier’s supplies of commercial accommodation, cannot be revoked within 12 months, and a further choice cannot be made within 12 months of a revocation. The Australian Taxation Office (ATO) commercial residential property guidance sets out the three practical options with worked examples.
Three consequences follow for a developer. The 70 per cent test is a mix question, so a hybrid park’s GST position can move as the tourist and permanent mix moves, and a conversion strategy can change the answer part way through a hold. The section 87-25 choice is a 12-month commitment, so it interacts with input tax credits on a capital works programme. And a single strata-titled holiday apartment sitting inside commercial residential premises is different again: the Australian Taxation Office (ATO) states that such an apartment is residential property and its lease is input taxed, so a product with individually titled units needs that sorted before the structure is fixed. The broader GST treatment of property development in Australia covers the acquisition and development side.
Is there a land tax exemption for a caravan park or land lease community?
In several states, yes, and the conditions attached to the exemption can be more restrictive than developers expect.
New South Wales. Section 10Q of the Land Tax Management Act 1956 provides a low cost accommodation exemption, applied through Revenue NSW Ruling LT 071. The ruling requires the land to be a community or residential community under the Residential (Land Lease) Communities Act 2013, and states that “an exemption or reduction in taxable value does not apply unless the community is registered under section 14” of that Act. Where the land is used solely for the community and more than 50 per cent of the homes are used and occupied by at least one qualifying home owner, the land is exempt. A qualifying home owner is a person who is retired or at least 55 years old, who owns a home on a residential site and uses and occupies it as their principal place of residence. Partial-use reductions apply on an area or site-count basis under sections 10Q(4) and 10R(3) to (3C). The taxing date is midnight on 31 December.
That test cuts differently against a mixed-age product. An over-50s community will generally clear the qualifying home owner test comfortably. An all-ages land lease community may not, and the exemption is binary on the 50 per cent line rather than proportional to it.
Victoria. Section 77 of the Land Tax Act 2005 provides an exemption for land the Commissioner determines is used as a registered caravan park, meaning a caravan park within the meaning of the Residential Tenancies Act 1997 that is registered under regulations made under section 515 of that Act. The owner must apply, and where only part of the land is so used, only that part is exempt. The State Revenue Office Victoria exemptions page is the entry point.
Queensland. Section 54 of the Land Tax Act 2010 provides an exemption for land used predominantly as a moveable dwelling park, where more than 50 per cent of sites are occupied, or solely available for occupation, for residential purposes for periods of more than six weeks at a time. The Queensland Revenue Office public ruling LTA054.1.1 covers when a site is treated as available for occupation.
The pattern across all three is that the exemption is tied to operating status, not to ownership. A park that is closed, deregistered or holding vacant sites through a redevelopment period may fall outside the exemption for the years in which the works run. That is a real land holding cost during the very period when the asset produces no income, and it is one of the more common omissions in a park redevelopment model.
What actually drives the feasibility of a park development?
Four inputs do most of the work: site count, site rate, occupancy and the capitalisation rate at exit. Because a trading park is usually valued off its income, small movements in rate compound into large movements in value.
Site count multiplied by rate multiplied by 52 gives gross site income at full occupancy. Apply occupancy, deduct operating costs, and the result is net operating income. Divide by the capitalisation rate for an indicative value. The trap is that all four inputs are correlated, and improving one often degrades another.
Take the 161-site park from the yield test above, rounded to 160 long-term sites, with illustrative inputs rather than market figures.
- 160 sites at $200 per site per week: 160 × 200 × 52 = $1,664,000 gross site income at full occupancy
- At 95 per cent occupancy: $1,580,800
- Operating costs at 35 per cent of income: $553,280
- Net operating income: $1,580,800 − $553,280 = $1,027,520
- Capitalised at 6.0 per cent: $1,027,520 ÷ 0.06 = $17,125,333
Now change one input. Hold everything else and drop the site rate to $180 per week.
- 160 × 180 × 52 = $1,497,600 gross at full occupancy
- At 95 per cent occupancy: $1,422,720
- Operating costs at 35 per cent: $497,952
- Net operating income: $924,768
- Capitalised at 6.0 per cent: $15,412,800
A $20 per week movement in site rate, roughly 10 per cent, moves indicative value by about $1.71 million on this parcel. The same sensitivity runs the other way through the capitalisation rate. Neither is something to assume from a comparable in another postcode, and both are questions for a valuer with local park evidence.
Three further points shape a park model in ways a residential subdivision model does not.
Income growth may be capped by statute. The Queensland ceiling of the greater of the Consumer Price Index or 3.5 per cent is the clearest example. Where a cap applies, a growth assumption above it is not conservative or aggressive, it is simply unavailable.
Operating costs are a genuine business, not a body corporate levy. A park carries staff, reception, grounds, waste, water, power reticulation, pool and amenities maintenance, marketing and booking channel costs. The operating expense ratio is the input most often lifted from a summary document without testing. The park’s own trading accounts, occupancy statements and channel reports are where that number should come from.
Capital replacement is now partly mandated. The Queensland requirement for maintenance and capital replacement plans turns a discretionary sinking fund into a documented obligation. Even outside Queensland, cabins, roads and effluent systems depreciate on a shorter cycle than a building, and a park model without an ongoing capital line understates the true cost of holding.
The mechanics of a capitalised valuation are covered in the guide to capitalisation rates and yields, and they apply to a park as they do to any income-producing asset.
Where do park deals come unstuck?
Flood and bushfire. Parks sit disproportionately on riverside, coastal and bushland land, because that is where the tourism demand is and where the land was cheap when the parks were established. Both hazards are now assessed more stringently than when most existing parks were approved. In Victoria the fire safety report from a fire authority is a precondition of registration and renewal. In New South Wales flooding and fire safety standards were part of the exhibited Phase 1 review of the caravan park framework. A park that has traded for forty years on a floodplain is not evidence that a redevelopment on the same footprint will be approved.
Existing use rights. A park operating on land where the current zoning would no longer permit it may be relying on an existing use right. Those rights are generally narrow, tied to the scale and nature of the use as it lawfully existed, and can be lost through abandonment or extinguished by the very works you propose. A staged redevelopment that pauses trading can be more dangerous here than one that does not, and this is a question for a planning lawyer at due diligence rather than after exchange.
Effluent and water. A park with 160 sites generates a wastewater load comparable to a small village, often without reticulated sewer. On-site effluent capacity, the land application area required and the potable water supply are frequently the binding constraints on site count, ahead of any planning standard. That work belongs in early feasibility, because it can remove a third of your sites.
The occupant register. One of the most valuable documents in a park due diligence is a complete, current schedule of every occupant, the agreement type, the start date, the rent, the review basis and the length of continuous occupation. Whether someone has crossed a statutory threshold, and which Act applies to them, is a matter of fact about their stay rather than what their agreement calls it. In South Australia the 60-day presumption does that work. In the Northern Territory the five-year rule for holiday parks does.
The transfer of the operating approval. In Western Australia a licence transfer requires prior written local government approval under regulation 55, and similar mechanics apply elsewhere. If the operating approval does not transfer cleanly on settlement, you own a park you cannot lawfully run.
How do holiday parks work in New Zealand?
New Zealand regulates camping grounds through the Camping-Grounds Regulations 1985, made under the Health Act 1956, which remains in force. Camping grounds must be registered with the local authority, and registration requires a camp plan showing the camp boundaries and the position and numbered boundaries of every site, corresponding to markings on the ground, together with buildings, roads, drainage and ablutions.
The Regulations set standards that shape a layout directly. Camp sites are required to be a minimum of 53 square metres with a minimum width of 8 metres, tents or vans must be at least 3 metres apart and at least 1.5 metres from the site boundary, potable water must be within 25 metres of each site, ablutions within 75 metres, and refuse containers within 50 metres. Sanitary fixture ratios are set per person, with no site deemed to accommodate fewer than 3.5 persons. The Camping-Grounds Regulations 1985 are the source, and a summary published by Clutha District Council sets out the same figures in plain form. Registration follows an inspection by an environmental health officer and is renewed annually in most districts.
On tenancy, section 5 of the Residential Tenancies Act 1986 excludes occupation of a cabin, caravan, vehicle, tent or other structure located in a camping ground subject to regulations under the Health Act 1956 and intended for human habitation for periods not exceeding 50 days in any continuous term of occupancy. How that exclusion applies to a resident who stays well beyond that is a question for a New Zealand lawyer on the facts, not one to resolve from the section alone.
Land use consent is assessed under the relevant district plan and the activity status varies considerably between districts, as set out in the guide to resource consent for New Zealand developers. The framework itself is changing. The Natural Environment Bill and the Planning Bill, introduced in December 2025 to replace the Resource Management Act 1991, had been reported back from select committee but were not enacted at the date of writing, which is worth confirming before committing to a long consenting programme.
What to ask your planner, lawyer and accountant
Ask your town planner:
- Is a caravan park, camping ground or manufactured home estate permissible on this zoning, or does it rely on an existing use right, and if the latter, what is the scope of that right?
- What site count is realistically supportable here once communal area, roads, setbacks, ablution catchments and effluent land application are laid over the parcel?
- In New South Wales, what maximum number of long-term sites is the council likely to specify as a condition under section 131(3) of the State Environmental Planning Policy (Housing) 2021, and what evidence supports a higher number?
- What flood and bushfire controls apply to the land now, as distinct from when the park was established, and what do they do to the developable footprint?
- Does converting part of the park from short-stay to long-term occupation require a new consent or a modification, and how long does that take with this council?
- Which reports will the consent authority require, and can any of them be brought forward into due diligence?
Ask your property lawyer:
- Which Act applies to each occupant on the register, based on their actual length and nature of occupation rather than the label on their agreement?
- What is the complete termination sequence if we want to close or change use, including any requirement to have the replacement approval before serving notice, any regulator notification, and the minimum period to vacant possession?
- Are there any procedural steps that void a notice if missed, such as the requirement in Victoria to apply to the Tribunal within 30 days of serving a notice to vacate?
- What compensation or relocation obligations attach to each termination ground in this state, and which grounds carry none?
- Does the operating licence, registration or activity approval transfer on settlement, what consent is required, and what happens if it is refused?
- What restrictions apply to a home owner selling a home on site, and does the operator have any entitlement to commission or any ability to refuse a new site agreement?
- Are there conditions on the existing consent or licence that limit site numbers, occupancy periods or the mix of short and long-term sites?
Ask your accountant:
- Is this park commercial residential premises, and how does the 70 per cent test in section 87-20(3) apply to our projected mix of short-stay and long-term occupants?
- Should we be making a section 87-25 choice, and how does that interact with input tax credits on the capital works programme given the 12-month lock-in?
- If part of the product is individually titled, does that part fall outside commercial residential premises and become input taxed?
- Does this land qualify for the state land tax exemption for parks, what are the registration and occupancy conditions, and what happens to the exemption during a redevelopment period when the park is not trading?
- How should the mandated capital replacement obligation, where one applies, be treated for tax and reflected in the operating expense ratio?
- What is the appropriate treatment of the acquisition where we are buying a trading business alongside the land?
Ask your quantity surveyor and civil engineer:
- What is the achievable site count once the effluent land application area and potable water supply are sized for the proposed occupancy?
- What is the cost per site for civil works, power reticulation, water and wastewater on this ground, and how does that change with slope and soil?
- What is the realistic replacement cycle and cost for cabins, roads and amenities on this asset, and what does that mean for an ongoing capital line?
None of those answers come out of a listing, and most of them are available inside a fortnight if you ask early.