I've just received my first land tax bill and would like to know how to minimise any future bills. I like the above suggestions but none of them are suitable in my case.Land Tax - a Tax on the Rich?
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?).
The only way I can buy in other states is by employing a buyer's agent or by spending lots of time interstate learning about markets that I know very little about. I'd rather buy in an area that I am familiar with. I've read lots about buyers agents, some of it has been positive, some not so; hence, not prepared to use one at the moment.
I like to buy new property that comes with high depreciation allowances. My wife's income is very low so if I buy in her name, I won't be able to take advantage of the tax losses, in particular the depreciation. This also applies to trusts which don't allow trustees to distribute losses.