10% return comm property

[geoffw]

In NSW I have to pay land tax. The amount of tax depends on whether or not the owner has land holdings above the threshold so it's perhaps unfair for the tenant not to have the certainty of knowin how much land tax has to be paid.

 

[Scott No Mates]

In NSW I have to pay land tax. The amount of tax depends on whether or not the owner has land holdings above the threshold so it's perhaps unfair for the tenant not to have the certainty of knowin how much land tax has to be paid.

It all comes down to what YOU negotiate with the Lessor. I have seen several scenarios - landlord pays, tenant pays but gets the benefit of the threshold, tenant pays increases above a base year (market rent review year -1) & tenant pays % of landtax.

When you negotiate your lease, you ask the question - is the lessor liable for landtax? What is the rateable value of the property? Then you negotiate how you want to treat the land for land tax purposes ie do you get the benefit of the threshold (as if it were the only property owned by the lessor ie $400k threshold).


I have even seen (and won the argument) where landlord pushed entire land tax on owned and licensed section of land onto the tenant. The licence agreement didn't provide for land tax (which exceeded the lessor's owned portion) so they had to wear more than half of the LT for the preceeding years as well (geez my clients love me when I do that).

 

[geoffw]

I bought a property with the lease in place. Rates and water were mentioned, land tax was not.

 

[handyandy]

My lease (to-be) is land tax is payable by tenant above threshold, based on a single holding ownership.

Suspect that land tax on property does not exceed threshold. Accountant is currently reviewing structure and whether to have company who's sole owner is trust should own it to get another threshold allowance.

My wife will be sole director this time.

Cheers