Example FAQ - The dreaded Land Tax
Land Tax - a Tax on the Rich?
Information
In all states ( except NT) of Australia there is a tax applied on the total unimproved value all land owned in that state. First introduced as a tax on the rich, due to rapid increases in property prices and the land they sit this tax is now become mainstream...not that any state governments Liberal or Labor are complaining about the extra income land tax is generating.
Many feel that land tax is an unfair tax on those who choose property as an investment vehicle, no tax is charged for those owning shares for example.
What is unimproved land value: ie. in simple terms it is there (state revenue office) estimate of the value of your total land holdings without buildings (improvements).
Example: Lets say you personally own 3 investment properties and your personal private place of residence all in Victoria, ie total 4 properties, total value of those properties is $1.680Million dollars, ie the land itself (not the improvements, ie the houses/apartments etc) is worth $1.080 Million.
Next year you will get an account from your state revenue office (or you may have to tell them you probably owe them money). In the case of Victoria then your $1.080 Million of land will be taxed for $7,630 (will that be a cheque or cash?). Note that if you owned $1.080Million of NAB shares you wouldnt have to pay a cent of company ownership taxes.
How to Avoid or Minimize Land Tax
Tax Scale Information
Related Forum Threads
External Links, Books and Resources
Land Tax - a Tax on the Rich?
Information
In all states ( except NT) of Australia there is a tax applied on the total unimproved value all land owned in that state. First introduced as a tax on the rich, due to rapid increases in property prices and the land they sit this tax is now become mainstream...not that any state governments Liberal or Labor are complaining about the extra income land tax is generating.
Many feel that land tax is an unfair tax on those who choose property as an investment vehicle, no tax is charged for those owning shares for example.
What is unimproved land value: ie. in simple terms it is there (state revenue office) estimate of the value of your total land holdings without buildings (improvements).
Example: Lets say you personally own 3 investment properties and your personal private place of residence all in Victoria, ie total 4 properties, total value of those properties is $1.680Million dollars, ie the land itself (not the improvements, ie the houses/apartments etc) is worth $1.080 Million.
Next year you will get an account from your state revenue office (or you may have to tell them you probably owe them money). In the case of Victoria then your $1.080 Million of land will be taxed for $7,630 (will that be a cheque or cash?). Note that if you owned $1.080Million of NAB shares you wouldnt have to pay a cent of company ownership taxes.
How to Avoid or Minimize Land Tax
- Own properties in multiple states, remember tax is applied to the total value in that state. Buy one property in NSW, VIC, TAS, ACT, QLD, WA, SA.
- Buy in NT, no land tax in NT.
- In some states buying individual properties in different trusts could limit the impact. For example in Victoria and QLD the first $150K is of land value is not taxed in a Trust but in NSW properties held in trusts are taxed from the first $1 of value.
- Buy some in your name and one in your spouse’s name.
- Buy overseas such as New Zealand where land tax does not exist (yet?).
Tax Scale Information
- Land Tax Victoria
- Land Tax SA
Up to $50, 000 Nil
$50,001 - $300,000 35 cents for each $100 or part $100 over $50,000
$300,001 - $1,000,000 $875 plus $1.65 for each $100 or part $100 over $300,000
$1,000,001 and over $12,425 plus $3.70 for each $100 or part $100 over $1,000,000
- Land Tax: WA
0 50,000 Nil
50, 000 100,000 $75.00 plus 0.15 cent for each $1 in excess of $50,000
100,000 190,000 $150.00 plus 0.25 cent for each $1 in excess of $100,000
190,000 325,000 $375.00 plus 0.45 cent for each $1 in excess of $190,000
325,000 550,000 $982.50 plus 0.80 cent for each $1 in excess of $325,000
550,000 850,000 $2,782.50 plus 1.20 cents for each $1 in excess of $550,000
850,000 1,250,000 $6,382.50 plus 1.60 cents for each $1 in excess of $850,000
1,250,000 2,000,000 $12,782.50 plus 2.00 cents for each $1 in excess of $1,250,000
2,000,000 5,000,000 $27,782.50 + 2.30 cents for each $1 in excess of $2,000,000
5,000,000 $96,782.50 + 2.50 cents for each $1 in excess of $5,000, 000
- Land Tax: NSW
] - Land Tax: ACT
- Land Tax: QLD
Related Forum Threads
- Land Tax Thread
- DaleGG provided this document
External Links, Books and Resources
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