Land Tax in Qld [Archive] - Somersoft Property Investment Forums

buzzlightyear

25-03-2005, 09:06 AM

Saw it briefly being recapped on Sky News last night. From what I saw, it was referring to the impact that increased valuations due to the property price increases in Brisbane (specifically) would have on land tax assessments. However, it didn't actually give an example of what that impact would be (at least from what I saw).

Lplate

25-03-2005, 12:54 PM

The Beattie Govt is talking about limiting/reducing this tax.

Howard could have provoked the move by firing salvos at States over their taxes. Howard & Costello are playing politics to switch attention away from criticism of increasing federal taxes. Howard is great at diversionary tactics and divide and conquer. :D :D However some good could come of it for property owners in Qld.

I found this history of Land Tax in a C'wealth Govt site:

"By 1900 all colonies were collecting income tax, often by different methods and at different rates. It wasn't until 1915 that the Fisher Commonwealth Government introduced an act for income tax to be collected by the Commonwealth, although States were still also collecting some income tax. By 1918 income tax amounted to one third of Commonwealth tax revenue and half of State tax revenue.

With Federation in 1901, the power to impose customs and excise duties was transferred to the new Commonwealth Government. The Commonwealth Government only kept one quarter of the money it raised, giving the rest to the States.

In 1910 a land tax was introduced by the Commonwealth Government to provide for the defence of the nation and to prepare for a major increase in migration. The land tax was also introduced to encourage large landholders to subdivide their land and sell it to settlers. Many large landholders were wealthy Englishmen who would rarely visit or use their land. Introducing a land tax encouraged them to sell to settlers who would use the land productively."

Lplate

Sunstone

25-03-2005, 07:03 PM

Dear Marty,

Something related I put up earlier:

http://www.somersoft.com/forums/showpost.php?p=145152&postcount=58

Cheers,

Sunstone.

buzzlightyear

25-03-2005, 10:30 PM

Howard & Costello are playing politics to switch attention away from criticism of increasing federal taxes

Lplate, what taxes are you referring to?

Lplate

25-03-2005, 11:41 PM

Lplate, what taxes are you referring to?

buzzlightyear
The OBCD said Australia was one of the highest taxed countries in the world.
OBCD (http://www.abc.net.au/news/newsitems/200503/s1320672.htm)
http://www.abc.net.au/news/newsitems/200503/s1320672.htm
The PM and Treasurer had quickly reacted by blame shifting the criticism (high taxes) to the States. Very clever politics.
Of course all levels of Government are guilty of accepting the windfalls from booms and inflation. It's just interesting to watch them pass the buck.
Lplate

kissfan

26-03-2005, 07:06 AM

Thanks guys for the replies.

L-Plate, I agree re the different governments passing the buck, makes me sick, wish they could every now and then just bandy together and actually fix a problem instead of blaming each other.

Sunstone, thought this article may have had something in reference to which you had already posted, just wanted to double check, was thinking there was a possible backflip on the decision to limit/reduce this tax, thanks again.

Regards
Marty

Aceyducey

26-03-2005, 04:13 PM

LPlate,

Note that the OECD only considered Australia the highest taxed because they included state taxes.

We're nowhere near on the basis of Federal taxes only.

Hence the states are the issue again :)

The states did give an undertaking to remove stamp duty when the GST was introduced - they reneged.

Good on the Federal government for finally getting around to pulling them up about this.

Poor show by the states to 'defend their constituencies' by continuing to levy taxes that THEY promised would be removed.

Cheers,

Aceyducey

Lplate

27-03-2005, 12:35 PM

Aceyducey
Thanks and that is well clarified although it was something I was aware of. However the federal govt chose political head kicking and point scoring instead of positive leadership to address common problems. Bully boy cheeky stuff from Costello is divisive in intent.
All levels of govt need a serve - buck passing and lack of cooperative effort. Councils for example, accept windfalls from the property boom and still cry poor.
Lplate

gregjen

29-03-2005, 03:17 PM

Did some research on the land tax issue in Queensland.
Saw an article in the Courier Mail regarding a lady who
owned a block of old dwellings in New Farm.(Brissy).
Her land tax liability had changed from $6,000 to $24,000.
She is now considering her options. I checked these figures
on the site posted below and they seem to be correct.
Have a look around the site from memory there are some p.d.f
docs for download, with the tax scales. Apparently a public
sector staff action (industrial dispute) may have prevented earlier
delivery of appraisals hence debate, I know little about this subject
however this site may be of use. My first post on this site, hello
to everyone!
http://www.osr.qld.gov.au/taxes/land/index.htm

kissfan

31-03-2005, 01:17 PM

Hi all.

Just got my mail (wish I hadn't) and received 3 separate letters from Dept of Natural Resources and Mines (Qld) stating that land values are as follows;
property 1- land value gone from $26,000 to $91,000 (Ipswich Shire)
property 2- land value gone from $76,000 to $167,500 (Redland Shire)
property 3- land value gone from $84,000 to $150,000 (Redland Shire)

Has anyone else with Qld I/P's experienced this. Obviusly this means I will be up for Qld land tax for the first time. I still have another property not accounted for in the Ipswich Shire so by my calculations I will fall into the category of having to pay $4,465 in tax. NOT HAPPY.
Do I have to register these properties, the same as I did with my NSW I/P's with the OSR, or does the Qld equivalent send out a bill or what.

Hope this makes sense, I'm still spinning from the shock.

Regards
Marty

P.S How is this going to affect someone like Brenda Irwin who has quite a few I/P's in the Ipswich Shire.

kissfan

31-03-2005, 02:38 PM

Take 2.

Just checked out the Qld OSR website which states that the threshold is $275,997 (why not just make it $276K?), and the figures I was originally going on as stated in the Feb issue of API was on land valued at over $400K.
After I finished panicing I realised that these properties have been bought in my, my wife's and both names, so I think I/we will come in under the threshold, PHEW. Just hope my calculations are correct this time round.

Regardless of the above, does one have to register with the Qld OSR or do they cross reference with the Dept of Natural Resources and Mines thus making your land tax bill automatic (not that I want one)

Regards
Marty

keithj

31-03-2005, 03:36 PM

Just checked out the Qld OSR website which states that the threshold is $275,997 (why not just make it $276K?),Something to do with not issuing a bill for under $350.

Regardless of the above, does one have to register with the Qld OSR or do they cross reference with the Dept of Natural Resources and Mines thus making your land tax bill automatic (not that I want one)I received valuations from NR&M today - the enclosed leaflet stated 'The OSR will determine who will be required to pay land tax. OSR will contact you directly if you have a potential land tax liability'

ok180

31-03-2005, 04:18 PM

so how does the threshhold work exactly? Say you have land worth $400K do you pay land tax on $400K or $400K minus the $275,997 threshhold? Which would be land tax on $124,003

keithj

31-03-2005, 05:15 PM

so how does the threshhold work exactly? Say you have land worth $400K do you pay land tax on $400K or $400K minus the $275,997 threshhold? Which would be land tax on $124,003Did you follow the link in post #10 ?

The deductions link on that page states

Statutory deduction for natural persons

As of 1 July 2003, this deduction is $220,000 and is automatically allowed for natural persons who ordinarily reside in Australia.

So on $400K unimproved value, you (as a natural person & not a trustee) would be paying tax on $180K.

The difference between $275,997 and $220,00 is $55,977. The tax on $55,977 is $350 & they don't issue bills for less than $350.

See http://www.osr.qld.gov.au/taxes/land/info_sheets/Information_Sheet_2004-2005.pdf for more info. You're up for about $1700.

agent 86

31-03-2005, 06:55 PM

Brenda Irwin

01-04-2005, 09:13 AM

I thought myself very clever in not having to pay land tax. My total valuations were, between hubby and I, only $324,900. Since land thesholds are per individual, we were no where near having to pay land tax.

New valuations have changed all that. :(

Across all my 20 investment properties, even the ones out west, increases ranged from 200% to a whopping 360%. The total is now $1,117,200. Between hubby and I, we will now be up for $6,048.94 in land tax. Nasty! :eek:

see_change

01-04-2005, 09:27 AM

Bit Confusing for those with properties in Trusts.

It says that as a "natural person" you get the deduction for your threshold, but I couldn't specifically see the situation for IP's in Trusts.

The threshold is 170 for a trust, so logically one would assume if your valuations in a particular trust are 200 , your taxable value would be 30 K, but it doesn't specifically state that , while it does say that with regards to individuals.

So does someone with 200K value in a trust pay tax on the total amount ( 200 ) or 30 K ?

See Change

austini

01-04-2005, 09:37 AM

Hi Brenda,

I would have used a stronger word than "nasty". I posted my annoyance of the land tax increases under another thread.

I had already made my decision quite some time back to focus all longer term future investing in quality dividend paying stocks. This was partly based on the experiences and advice of a few very wealthy and retired investors who I had the good fortune of getting to know personally.

But as for our existing property portfolio we just have to wear the dramatically rising holding costs. It could be a long wait but when the property market becomes bullish some years down the track I will also be reducing the number of properties in our portfolio to only those few very best performers. In the meantime I just need to be patient.

Cheers - Gordon

austini

01-04-2005, 09:43 AM

Hi SeeChange,

I'm glad I'm not the only one having trouble understanding their Land Tax documents even though I read them multiple times. They are so badly worded especially for trustee ownership.

From what I understand once you have breached the $170K threshhold you are eligible for stamp duty on the entire amount starting at the first dollar.

There is a phasing in rebate that reduces the land tax payable somewhat but that cuts out at a certain figure (can't remember the exact amount).

I may be wrong and would also appreciate it if someone could advise if my understanding is incorrect.

Cheers - Gordon

natmarie73

01-04-2005, 01:17 PM

I'm with you guys - not over the threashold yet, but if I move out of one of my properties as I was planning to do, and rent, I will be up for some land tax. No more QLD properties for me - next stop Darwin! At least until the rents catch up and loans are paid down a tad anyway...

Nat :mad:

JPM

01-04-2005, 01:28 PM

Mry

01-04-2005, 06:14 PM

I wrote to the newspaper about this one, but I doubt my letter was published.

I basically said that unless the expenses of the State and/or Council have gone up 400% in the past year, they shouldn't be taxing people these extra whopping amounts. They should play around with thresholds and reducing the tax down for people so it took into account gradual increases of tax rather than these massive revenue grabs.

Brenda Irwin

01-04-2005, 06:36 PM

One redeeming feature of the new supa dupa ULV's is that you can present them to your lender and perhaps get a better valuation done to increase your equity. ;)

Jen

02-04-2005, 09:05 PM

Bit Confusing for those with properties in Trusts.

The threshold is 170 for a trust, so logically one would assume if your valuations in a particular trust are 200 , your taxable value would be 30 K, but it doesn't specifically state that , while it does say that with regards to individuals.

So does someone with 200K value in a trust pay tax on the total amount ( 200 ) or 30 K ?

See Change

I got whopped with just under $1500 land tax last year and the valuation was $162,500. The property is in our trust, so I assumed the greedy *//##'s start from the first dollar. They have a tax scale down the bottom of their pamphlet which indicates that taxes start if the land value is $4000. Now I wonder if I should have questioned it because it also says there is a $170,000 threshold ..?????
Also, I don't understand about the bit on getting a rebate. Do you apply for this? I certainly didn't get any rebate on that fee. :mad:
This years valuation is $260,000 so that is certainly going to hurt :mad: :mad:
I really think it is up to all of us to start putting pressure on the government to stop this revenue raiser. Although other threads have seemed to indicate it is a lost cause, there also seems to be momentum gaining in Victoria and as they say, from little things, big things grow.

Jamie

02-04-2005, 09:30 PM

One redeeming feature of the new supa dupa ULV's is that you can present them to your lender and perhaps get a better valuation done to increase your equity. ;)

If anyone has used this method with success Id love to hear about it :)

Had an assessment arrive in the mail yesterday for a property in QLD (2 props on one title) and the land value had somehow managed to increase from 50k to 130k in the space of 12 months.

Somehow, the value of the property has increased 25% (bank val) while the land val has increased 160%. What are my chances of convincing the lender they should double my equity in the property :rolleyes:

And its not state specific - reading the paper a few weeks ago (dont have it with me - perhaps someone who read it might have a link/more info) there was a list of every suburb in Sydney with both the increase in vals compared to the increase in land vals. From memory, on average across Sydney there was a 6% increase in real valuations over the 12 month period, while there was a 25% increase in land valuations (for the purposes of land tax). Can anyone explain how the Valuer General arrived at these valuations?

Reading my QLD assessment, there is a flyer that says how they arrived at the valuation, mainly based on comparable sales. I personally think its a load of *****.

Like everyone, I bemoan the payment of land tax, though as an investor I know its part of the cost of doing business. What I would like, however, is some transparency in the way land vals are attributed to each property - at the moment, the Valuer General is answerable to nobody but the Premier.

Jamie.

Jamie

02-04-2005, 09:49 PM

Brenda,

One of our properties (The Block) went from $125,000 to a new value of $680,000. I can understand why as it's 3/4 of an acre in the main street of town but geez I hope they change the land tax real quick.

None of our properties are under 220% increase, which they are claiming is the average???

Regards,
Jason

Just reread my whinge and saw your situation Jason - all I can say is Ouch :(

Hope you find some resolution to such an outlandish increase.

All the best,

Jamie.

the.j

03-04-2005, 09:14 AM

Jen

03-04-2005, 07:24 PM

I just checked my land valuation I received this week against the land tax I paid in February. My current valuation is $162,500 yet I paid land tax on a value of $180,625 in February.
The land tax assessment stated that it was $350 plus 1.03 cents/dollar over $50,000. I can't see anywhere in the pamphlet about 50K being significant & the 170K threshold now seems to be irrelevant.
How does THAT work????
I will certainly be phoning them tomorrow...I just get so tired of trying to keep up with these stupid government idiosyncrasies. I bet they have a perfectly good politically correct explanation that I won't understand! You know what they say : "If you can't dazzle them with brilliance..."

JPM

04-04-2005, 09:25 AM

You could dispute your increased value, within 42 days of notice as this brochure seems to mention.

Land Val (http://www.nrm.qld.gov.au/property/valuations/pdf/2005_land_val_brochure.pdf)

It would be good if the value was a government guarantee repurchase price!

In all honesty I cant dispute the valuation as I believe it to be correct. It's over 3000 sq mts and 800 sq mt blocks are going for around the $200K so i've got no problems with that. My issue is with land tax.Surely theres a better way.

The bank valuation on the property went from $740K to around $1.3 mill on this one in the space of 2 years if memory serves. This was when the land was supposedly $125K so I might go to the bank with the new land val to try my luck!!! When the last bank valuation was done I was trying to convince them to value it based on yield as it's purely an investment property (14 units), which at 6% yield would have worked out around $1.8 mill. There were no comparable sales to go by as well but they used the third option which is the replacement cost. This is where the land value came into it and they told me they used $125K. So I think i've got a fair case for an increase in equity. Thats the positive of the situation.

And of course the increase in net worth!!!!!!!!!!!

Regards,
Jason

perky29

04-04-2005, 02:02 PM

Another unhappy person....
My trust has around 200k of ULV in it.
The threshold is 170k
I rang them up to find out what I am up for - I thought it would be the 30k difference. Its not.
I will pay $1895 on the 200k amount.
There is a very small "phasing in" rebate available , but I will still be up for at least $1700 by my calculations.
I asked why (once it gets above the 170k) - that the WHOLE amount is up for land tax, and was advised by the operator "I don't know". Great help that was. :mad: :mad:

natmarie73

04-04-2005, 02:09 PM

Perky, that is the opposite what they told me just a few hours ago when I phoned. My query related to natural persons not trusts, so maybe the rules are different for both but I would think that if they have thresholds for both, the rules would be the same.

Anyway, according to the person I spoke to, the natural person threshold is really $220.000 and you are liable for tax once UPV gets above $275.997 as they don't bother taxing the $55.000 in between. You then deduct the $220.000 from total amount and calculate tax on the difference, not the whole amount - I can't see why it would be different for property held in trusts, but then again it is QLD govt and when have they ever done anything logical?

Nat :)

edit - just looked at OSR website again and the statutory deduction of $220.000 only applies to natural persons. :(

perky29

04-04-2005, 02:19 PM

Now I am confused.
So is it possible that the 170k has an extra 50k allowable (like with the individuals name).
I probably think not - when I look at that website it mentions the phasing in bit - thats all (at the bottom) - I could not copy/paste it.
http://www.osr.qld.gov.au/taxes/land/info_sheets/Information_Sheet_2004-2005.pdf