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?).
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.
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.
Any suggestions???