Land tax calculation

[rabidz]

I'm still confused on how SRO Victoria calculate the land tax.
I checked their website, land tax is payable when total taxable value of landholdings is more than 250k.

Say, if I have 2 investment properties (both joint name on each property), how they are going to calculate the land tax?

For example:
Property 1:
CIV = $350k
Site Value = $175k
Name on Title = Mr Smith & Mrs Smith (joint)

Property 2:
CIV = $295k
Site Value = $ 160k
Name on Title = Mr Smith & Mrs Smith (joint)

So, how much is the total taxable value of Mr Smith (individual)?
Since the Site Value is less than 250k for each property, will I have to pay the land tax?

Thanks.

 

[Terry_w]

Not that familiar with VIC, but if it was NSW it would be like this. VIC may be different.

Assuming site value = land value

$175,000 + $160,000 = $335,000

THis is $85,000 over the threshold.

Therefore $85,000 x rate

 

[handyandy]

Not that familiar with VIC, but if it was NSW it would be like this. VIC may be different.

Assuming site value = land value

$175,000 + $160,000 = $335,000

THis is $85,000 over the threshold.

Therefore $85,000 x rate

Did you have a hard night?

NSW threshold is 2013 - 406k and 2014 - 412K

http://www.osr.nsw.gov.au/taxes/land/about/rates#lt2014

Maybe you were applying the Vic threshold?

There is a calculator on the Vic sro site which seems to indicate that the threshold is per person not really sure. If you use the calculator it calculates out to a zero tax liability.

http://www.sro.vic.gov.au/SRO/SROCalcs.nsf/lt/0B46BAAD733BCA5CCA257CAB000314CD?EditDocument&#calc

Cheers

 

[Terry_w]

Did you have a hard night?

NSW threshold is 2013 - 406k and 2014 - 412K

http://www.osr.nsw.gov.au/taxes/land/about/rates#lt2014

Maybe you were applying the Vic threshold?

There is a calculator on the Vic sro site which seems to indicate that the threshold is per person not really sure. If you use the calculator it calculates out to a zero tax liability.

http://www.sro.vic.gov.au/SRO/SROCalcs.nsf/lt/0B46BAAD733BCA5CCA257CAB000314CD?EditDocument&#calc

Cheers

This is a VIC property so was applying the VIC threshold. I just meant I wasn't sure how it was apportioned.

 

[NewYork]

The calculator shows that the Joint ownership liability would be $445 - so then owner 1 and owner 2 would split that.

We just received our land tax notice - one property in joint names. They sent
us one notice with the total lax tax on it and both our names. I think its then upto you how the payment is split. Potentially the higher taxed individual could pay the 100% and claim the full amount although no idea if this is allowed.

They do have examples on the website but they are more complicated than the straight forward own two properties both in joint names one.

 

[Terry_w]

Potentially the higher taxed individual could pay the 100% and claim the full amount although no idea if this is allowed.

Normal principles would apply to this and it would be based on % ownership.

 

[Paul@PFI]

In most states each "land owner" is seperately assessed which poses some issues at times.

Lets say Dave and Mabel own two IP's. Each 50/50.
Mabel also owns a IP 100%


Dave & Mabels joint holdings are taxed as an entity....If over the threshold the "partnership" pays LT as individuals - One assessment. The individuals are also assessed for their respective shares (secondary assessments). Since Dave owns no additional land no individual assessment issues. Mabel owns additional property so they assess her 50% share of two props + the other. They then credit the amount due for a50% share of the partnership LT.

So aggregate land interest is always an issue and why ALL property ownership should be registered as Mabel could easily consider a small land interest in a home unit might be well under the threshold. However her other interests can push it over.

 

[rabidz]

In most states each "land owner" is seperately assessed which poses some issues at times.

Lets say Dave and Mabel own two IP's. Each 50/50.
Mabel also owns a IP 100%


Dave & Mabels joint holdings are taxed as an entity....If over the threshold the "partnership" pays LT as individuals - One assessment. The individuals are also assessed for their respective shares (secondary assessments). Since Dave owns no additional land no individual assessment issues. Mabel owns additional property so they assess her 50% share of two props + the other. They then credit the amount due for a50% share of the partnership LT.

So aggregate land interest is always an issue and why ALL property ownership should be registered as Mabel could easily consider a small land interest in a home unit might be well under the threshold. However her other interests can push it over.

Good point.
Just a question, if we didn't receive any letter from SRO and we know that it's over the threshold (thus, we have to pay LT), what should we do?
Do we need to declare to SRO ourself or wait or ... ?

Thanks

 

[Paul@PFI]

They will catch you later.....
- They can backdate up to 4 years.
When you sell any property you need a land tax clearance cert. They detect it before you sell then smash you. Might be wise to call them and ask. Face it head on.

Remember it is YOU who registers each property not them. Its possible land values have changed or your calcs are wrong so dont assume its them.

 

[rabidz]

They will catch you later.....
- They can backdate up to 4 years.
When you sell any property you need a land tax clearance cert. They detect it before you sell then smash you. Might be wise to call them and ask. Face it head on.

Remember it is YOU who registers each property not them. Its possible land values have changed or your calcs are wrong so dont assume its them.

Thanks Paul.
Good advise

I will register all my IPs voluntarily before the end of financial year.

 

[k88k]

Bump...

Can someone confirm exactly on what date when the land tax is calculated?

I own 1 IP (below $412k land value), then recently bought another IP in May 2014.

Therefore I will be over the minimum NSW land tax threshold and will be subject to land tax.

Currently I am now doing my tax return for 2014, do I have to pay land tax for the year end 30/06/2014?

My accountant says I do Not, as the land tax is only calculated as at 31st December (31/12/2014) every year. Which therefore means I do not need to pay tax for 2014tax yr, only from 2015 tax yr onwards.
Is this correct?


Also I had rented out 2 of my rooms, during the 2014 tax yr, at my principle place of residence (which I still live in). Since I rented a portion of my principle place of residence, will this land be subject to land tax (as it will be over the $412k nsw, if I include my first IP)

Thank u,
K

 

[Paul@PFI]

Bump...

Can someone confirm exactly on what date when the land tax is calculated?

I own 1 IP (below $412k land value), then recently bought another IP in May 2014.

Therefore I will be over the minimum NSW land tax threshold and will be subject to land tax.

Currently I am now doing my tax return for 2014, do I have to pay land tax for the year end 30/06/2014?

My accountant says I do Not, as the land tax is only calculated as at 31st December (31/12/2014) every year. Which therefore means I do not need to pay tax for 2014tax yr, only from 2015 tax yr onwards.
Is this correct?


Also I had rented out 2 of my rooms, during the 2014 tax yr, at my principle place of residence (which I still live in). Since I rented a portion of my principle place of residence, will this land be subject to land tax (as it will be over the $412k nsw, if I include my first IP)

Thank u,
K

Land tax in NSW is levied at midnight on 31st Dec of each year. ie 31/12/13 is 2014 land tax. Only registered land owners are assessed. Failure to register can lead to penalties and a clearance certificate detects non-compliance when land is sold.

I recommend ALL landowners register for land tax that way valuation changes wont accidentally trigger land tax without knowing. If you are under the threshold nothing will happen.

The land value is not shown on rates notices etc. In NSW they also use a smoothed three year average. OSR can tell you the land value for LT purposes over the phone.

 

[Terry_w]

Across the various states there are about 4 different dates used. It is based on the state the property is lcoated in.

 

[Paul@PFI]

Across the various states there are about 4 different dates used. It is based on the state the property is lcoated in.

And then in some states they look backwards still....Just because something is a PPOR on 31 December doesn't mean its exempt....Its an illogical rule in my view to have a tax as at midnight on one day and then a rule which looks back for 6 months.

Uniform taxes would be nice.