land tax is = 1/2 % interest hike

[handyandy]

Hi All

Based on a purchase price of $400k and 80% lend the land tax on this property (if only property) is the equivalent to a 1/2 % interest rate hike.

$320K x .5% = $1600

$400k x .4% = $1600

So if the 1/4% hikes had a detrimental effect on the market then this is the equivalent.

Cheers

[BV]

Hi All

Based on a purchase price of $400k and 80% lend the land tax on this property (if only property) is the equivalent to a 1/2 % interest rate hike.
$320K x .5% = $1600
$400k x .4% = $1600
So if the 1/4% hikes had a detrimental effect on the market then this is the equivalent.
Cheers

Handyandy

Its not the 1/4% hikes that had the big affect on the market.
OK the interest rate hikes did affect people's borrowing capacity
but its primarily the RBA and the media who are talking down the market.

In regards to your Land tax example above, you shouldn't have used all
400K in your calculations.

A house thats worth 400K would have a land value of about 160K and if it
was a townhouse, or a unit its land value would be less.

Don't forget that its all tax deductible.

cheers