Land Tax Threshold ?????

T

triton07

Hi,

Can anyone tell me how the land tax threshold is calculated? Does the total threshold equal to what me & my partner own or is it individually calculated to what ever percentage we own on each property?

Cheers:)
George
 
triton07 said:
Hi,

Can anyone tell me how the land tax threshold is calculated? Does the total threshold equal to what me & my partner own or is it individually calculated to what ever percentage we own on each property?

Cheers:)
George
Click to expand...

Hi George,

assuming you're after NSW info, see:

http://www.osr.nsw.gov.au/taxes/land/faqs/

Have a look at the FAQ and navigate some of the links. There is even a calculator link to assist you with the numbers/thresholds.
 
Thanks Player for your reply, but I'm still having troubles finding out the correct information on the link provided.

Lets say this being for NSW:

Do I get a threshold of $369k & wife also gets $369k, a total threshold of $738k.

or;

A single threshold of $369K per household (Husband & Wife).

I'm not sure if I've asked my question clear.:eek:

Cheers:)
George

Player said:
Hi George,

assuming you're after NSW info, see:

http://www.osr.nsw.gov.au/taxes/land/faqs/

Have a look at the FAQ and navigate some of the links. There is even a calculator link to assist you with the numbers/thresholds.
Click to expand...
 
I have checked with the OSR in Queensland and you have the PPR exemption plus the tax free threshold each. So if you and your partner go 50/50 in an IP then half is alocated to each of you. Which makes your total threshold of $738k.

Cheers,

Bazza
 
I think the complication is the land tax free threshold.......
I have discussed this with my accountant, but I can't guarantee that I'm correct...
My understanding is that if I own a property with a second person, where my total land holdings are under the land tax threshold, but their total land holdings are above the land tax threshold, then land tax still applies to my share of the property.

So, this can be a fairly hefty additional fee to consider when buying jointly. I'm currently considering buying together with a family member, and we would be in the situation above, with me being the loser, unfortunately. But if we go ahead, it would be a great investment for the future, so well worth the extra costs.
Pen
 
Bazza said:
I have checked with the OSR in Queensland and you have the PPR exemption plus the tax free threshold each. So if you and your partner go 50/50 in an IP then half is alocated to each of you. Which makes your total threshold of $738k.
Click to expand...
Did you get this in writing? I believe there is only one exemption but would be very happy to be proven wrong. I can't find it anywhere on the website.

NSW OSR said:
Who is considered to be a land owner for land tax purposes?
An owner includes:
  • a sole owner
  • joint owners...
Click to expand...
This implies (to me), that there is only one exemption of $369k for owners in NSW.

http://www.osr.nsw.gov.au/taxes/land/faqs/
 
WillG said:
What happened in NSW in 2005?
Click to expand...
South Australia was the first Australian state to introduce a land tax, based on the unimproved capital value of land, in 1884. Land tax was first imposed in NSW in 1895. In 1906, the then NSW Premier, JH Carruthers, abolished land tax altogether as part of his major reform of local government. The aim was to provide local councils with an independent revenue source, land tax, for which they no longer had to compete with the State. This situation existed until 1956, when the State again imposed a land tax on the unimproved capital value of freehold land and land held from the Crown on tenures such as conditional purchase, settlement purchase, or a lease in perpetuity.

Currently land tax is a tax levied on the owners of land in NSW as at midnight on 31 December of each year. In general, the principal place of residence or land used for primary production is exempt from land tax. Properties potentially liable for land tax therefore include: vacant land, including vacant rural land; holiday homes; investment properties; and residential, commercial or industrial units.

On 6 April 2004, the NSW Treasurer Hon Michael Egan MLC delivered a Mini-Budget in which he announced significant changes to land tax in 2005. Previously, NSW land tax had a tax free threshold of $317,000 and a rate of 1.7 % after that. From 1 July 2004, the threshold was abolished and new, lower tax rates were introduced.

The changes to the tax regime announced in the Mini-Budget have resulted in considerable disquiet amongst investors, many of whom are liable for land tax for the first time. Approximately 400,000 investors will be charged a tax on their investment or holiday properties for the first time. Opposition Leader John Brogden MP has stated that the Liberal-National Coalition will abolish the vendor duty and reinstate an indexed land tax threshold.
Click to expand...
The Land Tax Management Amendment (Tax Threshold) Bill raises the land tax threshold from $330,000 to $352,000 with effect from the 2006 tax year, which the Government claims will return $53 million in tax relief to taxpayers. The bill is just a token effort on tax reform by a government that is addicted to tax. Since the new Premier has taken up that role, 14 new taxes have been levied on the people of New South Wales, totalling about $700 million. The $53 million in tax relief is just a token effort; it is nothing like the extent and scope of tax reform that is needed to make New South Wales competitive and get it back on its feet. Land tax impacts on almost everyone in the community: it impacts on business; it impacts on mum and dad investors, the sorts of people we ought to encourage to make provision for security of their future; and it impacts on renters because when investors pay land tax they try to pass the tax on to the renters of their properties. They all pay land tax to the Iemma Government.

This bill is a political gesture. The Iemma Government is trying to claw back some of the support it lost in a backlash against it. Literally thousands of people were made first-time land tax payers when the Carr Government removed the threshold in the 2004-05 budget and created 400,000 new land tax payers. The Carr Government raised the land tax rate to 1.7 per cent and, suddenly, investment was a no-go zone in New South Wales. Investment dollars flew to Queensland and Victoria. Jobs flew out of New South Wales, and that loss is continuing. New South Wales now has the highest mainland unemployment rate. Premier Iemma has presided over a fairly consistent increase in the rate of unemployment since he was installed as Premier.
Click to expand...

http://www.parliament.nsw.gov.au/prod/parlment/publications.nsf/key/LandTax:anupdate

http://www.parliament.nsw.gov.au/prod/parlment/HansArt.nsf/V3Key/LA20060308040
 
yo yo ma said:
Did you get this in writing? I believe there is only one exemption but would be very happy to be proven wrong. I can't find it anywhere on the website.

This implies (to me), that there is only one exemption of $369k for owners in NSW.

http://www.osr.nsw.gov.au/taxes/land/faqs/
Click to expand...

I rang the OSR Queensland (not NSW) and that was what I was told. Please call them and ask. They are quite helpful.

If there were only one exemption then you would be better off buying IPs in individual names or use a Trust which gives the Trustee company the exemption.

Cheers,

Bazza
 
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