Land tax in QLD?

[kennyboi]

How does land tax get calculated on equal joint ownership?

Say the threshold is at 600k and land is worth 800k, does the joint ownership gets considered as one entity like NSW and get hit with a land tax (800k > 600k), or does it get split in 2 from the beginning and considered only to each person share so that 400k < 600k and won't need to pay land tax?

I hope above make sense!

 

[RPI]

It is oer person or per entity

 

[Terry_w]

How does land tax get calculated on equal joint ownership?

Say the threshold is at 600k and land is worth 800k, does the joint ownership gets considered as one entity like NSW and get hit with a land tax (800k > 600k), or does it get split in 2 from the beginning and considered only to each person share so that 400k < 600k and won't need to pay land tax?

I hope above make sense!

http://www.austlii.edu.au/au/legis/qld/consol_act/lta201090/s22.html

 

[kennyboi]

I am not sure if I understand fully on the legal definition.

I like to know if it is assessed like NSW where joint ownership is assessed as "primary taxpayer" and individual share as "secondary taxpayer": http://www.osr.nsw.gov.au/sites/default/files/file_manager/ofs_lt06_1.pdf

From all the readings so far, it seems (but not sure) that QLD only assess land tax as individual share. (i.e. it seems not having this primary/secondary taxpaying assessments like NSW) Please correct me if I am wrong.

Just need to know so I can structure IP title accordingly. Thanks

 

[Terry_w]

From the act

(1) A co-owner of land?

(a) is taken to own part of the land in proportion to the co-owner's interest in the land; and

(b) subject to section 19, must be severally assessed.

 

[kennyboi]

From the act

What does it mean by "severally assessed"?

Is there a limit on number of properties on the tax free threshold?

 

[D.T.]

What does it mean by "severally assessed"?

Is there a limit on number of properties on the tax free threshold?

You need to read s19 where the severally assessed part is defined. It says that you have multiple properties they're aggregated.

And no, theres not a limit on number of properties. You could have 1 and be over or could have 10 and be under. Its the value that counts.

Read 1 a) is probably the bit that answers your question "is taken to own part of the land in proportion"

 

[Paul@PFI]

QLD has a few anomalies in the land tax act.

Each trust receives a separate threshold for land tax.
The threshold is $350K, not $600K for a trust. But...
You can have multiple thresholds if there are multiple trusts.
Good strategy shouldn't blend properties within some types of trust - A separate trust per IP
The same trustee can be the trustee for multiple trusts each with their own threshold. Thus, it is possible to have a number of properties with a common trustee company owner and not pay land tax....But.....

QLD has a indirect stamp duties rule. If the trust changes (changes to beneficiaries, appointor etc) or if its a unit trust and the unitholding changes then duty applies as if a transfer of title occurs.

There are some strategies but careful planning and knowledge is needed.

 

[kennyboi]

So, if the individual threshold is 600k and land value for investment is 800k jointly held, there's no land tax, right?

 

[RPI]

QLD has a few anomalies in the land tax act.

Each trust receives a separate threshold for land tax.
The threshold is $350K, not $600K for a trust. But...
You can have multiple thresholds if there are multiple trusts.
Good strategy shouldn't blend properties within some types of trust - A separate trust per IP
The same trustee can be the trustee for multiple trusts each with their own threshold. Thus, it is possible to have a number of properties with a common trustee company owner and not pay land tax....But.....

QLD has a indirect stamp duties rule. If the trust changes (changes to beneficiaries, appointor etc) or if its a unit trust and the unitholding changes then duty applies as if a transfer of title occurs.

There are some strategies but careful planning and knowledge is needed.

Same trustee could make it a a cloned trust then land tax
Woukd aggregate

A cloned trust has

trustee is the same for all the trusts
beneficiaries are the same for 2 or more of the trusts
beneficiaries have the same interests in those trusts when land tax is calculated.

 

[Terry_w]

If could be easy to make sure the beneficaries of any 2 trusts are not exactly the same to avoid the trusts being aggregated together.
http://www.austlii.edu.au/au/legis/qld/consol_act/lta201090/s20.html

But, look at the definition of beneficiary under s24
http://www.austlii.edu.au/au/legis/qld/consol_act/lta201090/s24.html

(1) The beneficiaries of a discretionary trust when a liability for land tax arises are the persons in whose favour a power of appointment has been exercised during the 12 month period ending when the liability arises.

A trap for young players

 

[MiQu]

Same trustee could make it a a cloned trust then land tax
Woukd aggregate

A cloned trust has

trustee is the same for all the trusts
beneficiaries are the same for 2 or more of the trusts
beneficiaries have the same interests in those trusts when land tax is calculated.

I am thinking of purchasing the next IP in Qld in a trust. However, the UCV on the properties we are considering is approx $500K, which is above the threshold.

Can I buy the IP in two different family trusts, using two different company trustees (but same directors), and pay no land tax?

 

[RPI]

Yes you can

 

[Scott No Mates]

Spend a penny to save a threepence?

 

[MiQu]

Yes you can

Thanks Darryl.