Article: Homes create 11 new property millionaires every 24 hours

[Sim]

http://www.smh.com.au/articles/2003/01/18/1042520820798.html

By Hannah Edwards, Property Writer
January 19 2003
The Sun-Herald


More than 11 property millionaires were created every day last year during Sydney's unprecedented real estate boom.

A total of 3123 million-dollar properties were sold between January and September last year - an average of 347 a month. This was up from 231 a month in 2001.

The number of new entrants into the million-dollar property club peaked at 490 in May when the Sydney market, fuelled by massive demand and low interest rates, was particularly strong.

... (more on the web)

 

[rossv]

mmmmmm....and how many of those home owners are now unknowingly caught in the insidious land tax grab and will soon get a bill demanding a donation for carrs coffers!



damn.......that feels better...





rossv

 

[Les]

G'day RossV,

What is the NSW law regarding land tax on owner occupied dwellings? Is there a ceiling? Or are all PPOR's exempt?

Regards,


Ps Good to see you again the other night...

 

[Rixter]

The WA Govt tried to bring that TAX in here only a short time back. But they (govt) eventually decided not to go ahead with it due to the high level of public outcry, meetings & petitions against it.

Funny how most of these people live in the well to do and fluential western suburbs who are the majority of land holders to be effected plus white collar voters of the govt in power.

 

[rossv]

Hi les,

I beleive the current rate on ppor is land value of 1.4mil,
an investment property is 220K
and beware.......if any property is owned within a trust strucure there is no threshold............




rossv

 

[scott]

Land Tax?

What determines the value of the land for land tax purposes?
Valuer General Assesment?
Scott

 

[XBenX]

correct scott - its also known as the UCV or unimproved capital value (its also the figure used to calc your council rates)

 

[bbruham]

G'day all,

They combine ALL your properties together so you can't escape land tax. So if you own three rental properties (houses) valued at $75,000 each, you pay land tax. There total value is $225,000.
Units don't pay land tax.

Bruce G.

 

[investor]

hi everybody.

This summarised from the SMH 18-19 Jan.

Land tax is a tax on the ownership of land in NSW. It was introduced in 1956. Valuations are done by the Valuer-General on the 1st of July every year and adjustments to the valuations done every three years.

As of Jan 1st 2003 land tax is due on the total value of land owned (besides your PPOR) above $261000

Therefore below threshold = no tax

At threshold = $100 tax

Above threshold eg,
total land value = 400000
less threshold 261000
= 139000
139000 x 1.7% = $2363 + $100

Gross tax = $2463

THE MILLIONAIRES' TAX

Introduced by the Carr goverment in 1998.
This tax applies to PPORS with land value above $1.68M as of 1st Jan 2003 at a rate 1.7% for the value above the threshold + $100 in a similar fashion to IP's.
By law it can only apply to the top 0.2% of homes in NSW or no more than 3000 homes in 2003. In 2002 1346 properties incurred it.

Regards
Investor.

 

[Sunstone]

Dear Rossv,

Time to move IP's to QLD :-------).

http://www.osr.qld.gov.au/tax_land.htm

When is land tax chargeable?
For the 2002/2003 financial year in Queensland, land tax is charged only if the total unimproved value of land owned is equal to or exceeds:

* for a natural person -
$221 665

* for a company, trustee, club, etc and a person who does not ordinarily reside in Australia (referred to as an "absentee") -
$150 000

To get around the $150K limit just make another trust each time to extend your threshold.

Cheers,

Sunstone.

 

[rossv]

Hi sunstone,

mmmmmmmm.....thanx for the advise.......I have just "donated" 4k to the qld osr!
I got caught in the changes on 6/8/02 where the 150K threshold dissapears after the taxable value exceeds 215K, with-in their so-called phasing in rebates!!
Have a look at this link and tell me if the tingling in my wallet is justified re trusts........it all goes over my head but whenever the osr puts out a new ruling you just know somehow somewhere in the fine print there is a crowbar aimed directly at thy wallet!
http://www.osr.qld.gov.au/duties/rulings/rrda011-1.pdf

By the way I agree with you on the brick vs timber post.......I have found brick to be far.....far..... better for banging my head against..



rossv....
(assuming the head banging position)

 

[handyandy]

Hi Bruce G

In NSW they do include the proportion of land attributed to your unit. You may get the illusion that you don't pay as you can own a few more before the total value exceeds the threshold.

There are (mainly) two things about land tax I hate

1) PAYING IT

2) That you have to tell them that you owe them money (in the first instance)

I HATE LAND TAX

Cheers

 

[Sunstone]

Dear RossV,

No problems. Good to see you're on the right track. Too bad about the $4K. Ah the price you and I pay for self-education

Went through the ruling. Key thing is how it affects us when we transfer ownership of one of our existing trusts. If we suddenly transfer ownership of a trust to another party who was not deemed to have been a family member or already had a vested interest in it, then there will be "corporate trustee duty" to pay on the transfer.

Nothing to worry about it we don't transfer, but when we eventually want to transfer our assets to another party who's not family, that's when potential issues may arise.

(Seems the government was trying to close the loophole on parties that were trying to get around capital gains tax by selling the trust that owned the property/ies rather than selling the property itself.)

Thanks for your last comment but be careful with your head. Amazing I can still remember asking someone what a "headbanger" was years ago. How language grows........

Cheers,

Sunstone.