Land Tax

[LearningMan]

OK - Maybe I missed something.

I just received my Land Tax Notice of Assessment for 2 IP's in NSW.

The schedule calculates the land tax for both IP's for each year starting in 2001. The total is then added up :eek: and they ask for payment within 4 weeks.

I thought the assessment ( without the threshold ) should only start in 2005. Why do they date it back to 2001 when there was a threshold ?

[Les]

G'day Learningman,

Note that I DON'T know NSW Tax Laws, but this sounds (on the surface) like a very valid reason to "object". If it's like Qld, they invite you to object within 42 days.

Regards,

[Crystal]

Hi Learning Man,

I've just received mine as well which taxes me back to 2001.

Your two property values, which are much higher than council land values, are added together and then the threshold is subtracted and land tax calculated.

I always thought I would be under the threshold, but according the the OSRs values, I've always been over!

I've got $6888 owing! I investigated claiming financial hardship, and using a payment plan, but interest is charged @ 13.5% past the original due date - which would cause futher hardship!!!!

Cheers,

Crystal

[Les]

G'day Crystal,

Does NSW use a "self-assessment", with the onus on you to line up for Land Tax? (I've heard some States do it this way). But having OSR values NOT equal to values on Rates notices sounds really strange to me. I wonder where the Council's get their land values from then?

Whatever is the answer, I really feel for both of you. I've been bitching about having to find $3500 (but it was expected, this year, for the first time). I guess I don't have it so bad after all.

Good luck to you both,

Regards,

[keithj]

Does NSW use a "self-assessment", with the onus on you to line up for Land Tax? (I've heard some States do it this way).Yes, in NSW the onus is on the landholder to register.

But having OSR values NOT equal to values on Rates notices sounds really strange to me. I wonder where the Council's get their land values from then? Councils (that I know of) use the average of the last 3 years valuations for rates calcs. The OSR uses the most recent valuation - which is usually higher.

[Les]

Thanks for that, Keithj - always nice to have clarification. Thank heaven mine are in Qld :D Less chance of a nasty surprise down the track...

Regards,

[Merovingian]

Does NSW use a "self-assessment", with the onus on you to line up for Land Tax? (I've heard some States do it this way).

What does SA do? Is SA self-assessment based? I've heard it's not, but just checking...

Thanks. :)

[Crystal]

GDay,
Yes, the onus was on the landowner to register with the Office of State Revenue. I hadn't bothered as I'd calculated that I was under the threshold.
I've owned property for 5 years and the council values aren't and have never been close to the values quoted on my land tax bill.
Now that the threshold has been abolished, all landowners are taxed.
Cheers,
Crystal
We are taxed when we buy, taxed yearly while we hold and taxed twice when we sell!

[geoffw]

NSW Government will be perceiving this to be the biggest benefit of the new land tax system- that many who slipped under the net previously (unintentionally in many cases) will now be paying the tax retrospectively- perhaps with penalties.

[kissfan]

Crystal & LearningMan

What councils are your I/P's in?

Just wondering if this will be a Sydney wide scenario

Regards
Marty

[chook]

I just received a land tax assessment for my principal place of residence. I will have to lodge an application to be exempt because I am living in it. This has happened because I owned this block of land (on which I have now built) while I lived in my previous principal place of residence but because I was under the threshhold, I never registered. The worrying thing is, that it was posted to my previous address and luckily, it was forwarded on to me so that I can apply to have this property exempted. If it had not been forwarded to me, I would have had interest adding up and never known about it. I bet there are people out there like me that will be getting assessments in the mail and never have them forwarded on to them. So it's probably best to front up to OSR and register.

[LearningMan]

Geoff, you are right ! Now it's time to collect money !!!

Kissfan - IP's belong to Randwick City Council.

[LearningMan]

On another note ... I know for CG tax you can nominate your PPOR for up to 6 years after you have left living there. I am wandering if you could the same for land tax ?

Chook, you raise an interesting point above.

I am wandering what would happen in the case you never registered your IP for land tax with the OSR and then sold it in a few years time. Can you imagine the interest bill you would be hit with :eek: :eek: :eek:

Not sure what you would do in this case.

[Crystal]

G'Day Kissfan,

My properties are in the Gosford Council area.

I have applied to have one of my properties excluded (2002 and 2003) due to the following rule which I have quoted below from the "Land Tax 2003 - Information Booklet"

"Land intended as the owner's principal place of residence.
This includes residential land - improved or unimproved - purchased with the sole intention of being used and occupied by the owner as their principal place of residence.
This exemption applies for two tax years immediately after purchase. It does not apply where a person, including a joint owner, owns and occupies other land as a principal place of residence. An owner can only be granted this exemption once."

I have never lived in, or claimed, any of my properties as a principal place of residence and it is improved residential land. I purchased the property with the "sole intention" of being used as my principal place of residence but it has always been rented because I cannot afford to live there. The above quote doesn't mention living in the property (as in the CG rule) in order to claim the exemption.

Can anyone see how the OSR could deny my exemption claim????

Cheers,
Crystal

[DD1]

With all the bs MR Smarmy(Peter Costello) is sprouting regarding tax cuts for the masses. A better and more effective way to now stimulate the economy would be to get rid of these rediculous money grabber taxes and prod us into the next boom.

An election next year is timed to use this as an election winner Im sure. But the buggers wont be backdating the thing then will they.

NSW has killed itself for the mum and dad investors out there and it even came up in the 2GO real estate show interview I did on Sunday.

Bob Carr is not doing himself any favours and the federal government isnt far behind.

Qld, Tassie and WA have all of my investment properties, with no interest whatsoever in a NSW IP either now or in the future.

DD1

[geoffw]

NSW has killed itself for the mum and dad investors out there Mum and Dad investors might be better off according to this SMH article (http://www.smh.com.au/news/National/Land-tax-cuts--but-not-for-big-investors/2005/05/17/1116095964736.html), but somebody with two or more "average" NSW properties is likely to be worse off.

[Thorpey]

Hi everybody,

here's the deal...........Bob's (un)fair deal

My wife and I have 2 IP's and PPOR which we rent to tenants, we reside in my wifes' family home.

You can claim exemption for PPOR (6 yr rule like CGT) but there is a raft of exclusion points, just to make it almost impossible.
eg: We have rented our PPOR for the past 5 years after living in it from purchase date for two years initially.........so far so good.....
but.......there is a small matter that prevents exemption in that you may only rent it out for 6 months of the year or less!!! :confused:
So far we still satisfy CGT exemption and believe it or not we would also be exempt from the Vendor Dutyif we sold it before the six years of renting out is up.
So a bit of double standards there from Bob Carr. He gets us for some land tax or we lose six months rent to avoid it :mad:

Councils use the Valuer Generals' valuations every three years, therefore the rates valuation is only valid for Land Tax calculations for that year, the next two years we are flying blind as nobody notifys us of the relevent valuations to our IP's !
We are expected to purchase these valuations from VGeneral or data vendors alike and then declare our liabilitiy.

Many, many people have been caught out this time, unbeknowns to them, that they have a liability. I too, thought the PPOR would be exempt and presumed we were under the thresholds of previous years, however, this has proved to be incorrect and so the PPOR put us over thresholds and BINGO BOB gets a payout!
We are up for $7000 going back to 2003 and looks like it will be around the $3000 mark each year increasing with valuations (bet they don't go down either, even though the market has fallen) :(

The actual legislation can be found on the OSR website under Land Tax, so read and weep folks cause Bob's got ya and ain't gonna let go now.
I seem to remember Bob Carr replying to the comment posed to him by an investor saying that this is a bigger burden than he thinks, his reply was (i recall) " it's tax deductible, don't worry too much...."

Anyway, I'm slowly getting over it, but, that's simply money that was not counted on spending and could have gone towards a course in Photography I had planned for next month.............that's gone now, thanks alot Bob.

Very little information available, unless you have the internet and nous to look it up, for investors to realise their liabilities and issues. I guess it's a case of you must explore your investment decision further and further and then count on the Govt. to pull the rug from under you.


Thorpey :)

[Thorpey]

Here's the link to the exemptions for land tax....

http://www.osr.nsw.gov.au/portal/page?_pageid=33,284222&_dad=portal&_schema=OSRPTLT