Doesn't the ATO pull you up on this? Can you elaborate on the total Land tax you have to pay as an individual and as a joint owner oif you owned $800K in joint ownership with your wife and $800K in your name only and let's say $800k in your wife's name?
At what point did you get sick of paying ridiculous amounts on Land Tax?
- Thread starter The_Bludger
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Doesn't the ATO pull you up on this? Can you elaborate on the total Land tax you have to pay as an individual and as a joint owner oif you owned $800K in joint ownership with your wife and $800K in your name only and let's say $800k in your wife's name?
Land tax in Victoria Vs WA
In Victoria if the company is publicly listed i.e. on the sharemarket it has to pay the single unit land tax component not the aggregate total that as a multi property owner the landlord has to pay. Am I incorrect in saying the same applies in WA Dazz?
I believe I can trace it back to the 26th of May 2004. That was the last time we ever bought a residential property.
Every property we have purchased since, the Tenant has kindly paid the Land Tax impost for us.
Not all "property" is the same.
In Victoria if the company is publicly listed i.e. on the sharemarket it has to pay the single unit land tax component not the aggregate total that as a multi property owner the landlord has to pay. Am I incorrect in saying the same applies in WA Dazz?
Hi nonrecourse,
The same applies here as per Vic. I do think the OSR chaps in each state get together and compare notes.....something like "So, how did you weedle more tax out of your Landlord's this year."
We avoid that "aggregated" bombshell.....(is there a worse law for Landlord's ??)....by purchasing each new property in a separate company.
We pay a tiny sum in set up costs each time, plus an irrelevantly small accounting cost every year to separate each company and trust. This then avoids the land tax aggregation law, and means that the Land Tax levied can be fully passed onto the single tenant, as per the single unit land tax component.
With a total Land Tax bill exceeding more than tad this year, we were fortunate to be able to palm over 90% of this off to our Tenants. Obviously (by law) the residential stuff we need to pay ourselves.
The same applies here as per Vic. I do think the OSR chaps in each state get together and compare notes.....something like "So, how did you weedle more tax out of your Landlord's this year."
We avoid that "aggregated" bombshell.....(is there a worse law for Landlord's ??)....by purchasing each new property in a separate company.
We pay a tiny sum in set up costs each time, plus an irrelevantly small accounting cost every year to separate each company and trust. This then avoids the land tax aggregation law, and means that the Land Tax levied can be fully passed onto the single tenant, as per the single unit land tax component.
With a total Land Tax bill exceeding more than tad this year, we were fortunate to be able to palm over 90% of this off to our Tenants. Obviously (by law) the residential stuff we need to pay ourselves.
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To date we've avoided this by spreading our purchases and now by buying units in good areas. In Tassie every one pays land tax but it's much lower level ( in the hundreds , rather than thousands
In Q'land each trust has a seperate threshold , so unless you're going to buy IP's where the land value is above that threshold you're ok.
In NSW we've put our recent IP purchase ( two units in Mosman ) in my personal name and the land value of these is below the land tax threshold. If we'd bought a house to a similar value , chances are it would have been over the land tax limit. Next one in NSW will be in my wife's name or in our super. Once we've reached these limits will probably go interstate again , or maybe OS , or maybe sit back and watch for a while .
Good time to buy nice places in good parts of Sydney at the moment IMHO.
Cliff
In Q'land each trust has a seperate threshold , so unless you're going to buy IP's where the land value is above that threshold you're ok.
In NSW we've put our recent IP purchase ( two units in Mosman ) in my personal name and the land value of these is below the land tax threshold. If we'd bought a house to a similar value , chances are it would have been over the land tax limit. Next one in NSW will be in my wife's name or in our super. Once we've reached these limits will probably go interstate again , or maybe OS , or maybe sit back and watch for a while .
Good time to buy nice places in good parts of Sydney at the moment IMHO.
Cliff
Ditto Cliff,
I have managed to pay under $750 per year in land tax by buying and spreading my holdings across many states.
NSW has one of the most punitive land tax rates.
Also, NZ and NT have no land tax and stamp duty....NZ has had large falls so may need to start looking there.
I have managed to pay under $750 per year in land tax by buying and spreading my holdings across many states.
NSW has one of the most punitive land tax rates.
Also, NZ and NT have no land tax and stamp duty....NZ has had large falls so may need to start looking there.
Dont come to Adelaide then, our Land Tax is disgustingly high and may well be an election issue at the next election. On your $800k holdings, you would be up for $6,600; if you purchased that next property for unimproved value of $350,000 you would be up for $17,000
Sometimes I wonder about buying in another state to lessen the land tax. What I have not considered until this thread is that because we buy locally and self-manage I am saving on PM fees.... .whereas if we buy in another state to avoid the land tax, we would be paying a PM which would perhaps be equivalent to the extra land tax we would pay if we bought locally.
Moot point really, because we don't plan on buying again any time soon, but food for thought.
Moot point really, because we don't plan on buying again any time soon, but food for thought.
Hi Dazz we did the same using Trusts but the Victorian Government recently passed legislation that adds .37% to the land tax equation that slugs us a couple of thousand for each trust. But again in Victoria it is only companies that are publically listed that as tenants have to pay the single unit land holding land tax impost but again it is us the landlord that pay the balance plus the .37%.
You mention companies, I assume that the company is the corporate trustee of a trust because if you buy property in a company there is no 50% capital gains tax relief for companies unlike trusts where the capital gain ends up back in the unit holders hands for the 50% concession.
But like everything in life there are variations, if the profits are left in the company the top tax rate is 30% whereas if the trust does not distribute the profit to the unit holders it is taxed at 47%. Its like a game of snakes and ladders. Lots of snakes being the state governments with their stand and deliver rapacious land tax highway robbery and the federal government with their company tax and GST.
I would say not, Wylie,
I have been fighting a Land Tax issue since December last year in QLD. To put it quite simply my Solicitor stuffed up and incorrectly registered the property at the Land and Titles in the incorrect trust name. Three properties in one trust took me over the Land Tax Threshold for trusts. The Land Tax was $3900. You would have to have some pretty hefty Management Fees to come up to that much. Even at 10% Management and not counting NG.
I bought in QLD because I thought it would boom before NSW, back when it did! I purchased four properties in QLD but placed them into two seperate trusts. Thus avoiding Land Tax.
Bludger,
Sometimes we have to step out of our comfort zone and find opportunity. Do a little research, go for a holiday and check out your suburbs. I prefer not to have all of my eggs in one basket.
If I had not ventured into QLD, I would still be sitting here in NSW waiting for something to happen with my property here.
Speaking of NSW....I do believe the wheels are finally turning.
Regards JO
Hello Lance))
Thinking about buying in WA after two in Melbourne. I checked the offocial calc on http://rol.osr.wa.gov.au/taxcal and it gives $7.710 from $2mln. Any other taxes I should be aware of?
Small RE owners are easy targets for communist taxes as it's expensive to "move out" if you don't like them.
So the state governments just keeps plying fees & taxes on the small holders who don't have the funds nor the inclination to donate to party coffers and attend their fund raising activities.
Those that do large developments, and give large donations, somehow receive "benefits" and kickbacks for contributing to the economy.
And of course relief on the regulations that small schmuck developers must adhere to the letter.
So the state governments just keeps plying fees & taxes on the small holders who don't have the funds nor the inclination to donate to party coffers and attend their fund raising activities.
Those that do large developments, and give large donations, somehow receive "benefits" and kickbacks for contributing to the economy.
And of course relief on the regulations that small schmuck developers must adhere to the letter.
Bolero, that figure is for $2m unimproved land value. Big difference between that and the market value of a house sitting on it.
For you to be paying that kind of land tax, you'd need to be holding over well $5m worth of resi IP's (depending on land content).
Not really worth worrying about if this is your first venture over here.
No surprises over here. Same ol' rates, taxes etc. as you get over there.
For you to be paying that kind of land tax, you'd need to be holding over well $5m worth of resi IP's (depending on land content).
Not really worth worrying about if this is your first venture over here.
No surprises over here. Same ol' rates, taxes etc. as you get over there.
I hate land tax as much as the next investor, and consider it grossly unfair that exemptions apply to trusts in some states (eg Qld) but not others (eg NSW) - forcing investors to consider IP's outside of their own state due to rising annual costs.
Units are a good alternative, but it's my prediction that a decade or so down the track, the rental market is going to suffer the ramifications of a lack of housing stock in areas closer to the CBD's due to this punitive and backward tax. Investors won't be able to afford to purchase freestanding housing unless it's in an outer or middle ring suburb, especially here in Sydney.
Units are a good alternative, but it's my prediction that a decade or so down the track, the rental market is going to suffer the ramifications of a lack of housing stock in areas closer to the CBD's due to this punitive and backward tax. Investors won't be able to afford to purchase freestanding housing unless it's in an outer or middle ring suburb, especially here in Sydney.
I spread my investments around the country for exactly this reason!
Though in some states like Victoria and SA land tax cut in early...250K and 110K respectively. But the rates they tax at till you reach about 700K-$1m is reasonable.
In my opinion...my home state has the worst one as Sydney land is expensive. Buying just one house within 15-20klms of Sydney will bring you at the land tax threshold. Buy another you are paying $100 plus 1.6% of every dollar.
I pay land tax in Vic (approx. $300) and SA (approx. $500). Still a lot less than some on this forum.
Though in some states like Victoria and SA land tax cut in early...250K and 110K respectively. But the rates they tax at till you reach about 700K-$1m is reasonable.
In my opinion...my home state has the worst one as Sydney land is expensive. Buying just one house within 15-20klms of Sydney will bring you at the land tax threshold. Buy another you are paying $100 plus 1.6% of every dollar.
I pay land tax in Vic (approx. $300) and SA (approx. $500). Still a lot less than some on this forum.
