Land Tax versus Strata Fee

[skater]

There are several things you can do to keep fees to a minimum.

Strata fees can vary from very low, to very high, depending on the block you purchase in, so try to keep away from those with high ongoing costs like lifts, pools, gyms etc.

To minimise your land tax liability, it may be necessary to purchase property interstate.

 

[devank]

Ways around this are to buy in different entities, although this also has tax consequences.

what 'entities' are you talking about? Other than an individual I'm not sure what other entity have land tax threshold.

 

[skater]

what 'entities' are you talking about? Other than an individual I'm not sure what other entity have land tax threshold.

In Victoria I believe, you can purchase in a Discretionary trust and you have a land tax threshold. Not so with NSW.

 

[Dazz]

There are several things you can do to keep fees to a minimum.

....or even nil.

Life is very simple indeed when one makes the right choices.

 

[Scott No Mates]

There are several things you can do to keep fees to a minimum.

Strata fees can vary from very low, to very high, depending on the block you purchase in, so try to keep away from those with high ongoing costs like lifts, pools, gyms etc.

To minimise your land tax liability, it may be necessary to purchase property interstate.

The ATO created a generous allowance called depreciation. It runs at about 2.5% of the building value (it essentially equates to how much you should either be spending annually or putting aside annually to keep your property in the condition it was built, if not it is deteriorating and will require greater maintenance at some point in time eg painting should be done every 7-10 years depending upon exposure to the elements/wear and tear, location etc),
kitchen cupboards will wear out/get water damaged and require replacement, carpets/floor coverings/window furnishings/air conditioners/hws etc..........).

I get concerned when strata levies are too low - what is not being done? If there is no money in the sinking fund, how often are you being hit for special levies because of a lack of foresight by the strata manager/exec committee?

WRT land tax, at some point you may become liable once your capital values exceed the concessional amount (it may take some time to surpass the threshold but it will happen).

 

[CHAOS]

My annoyance with Land Tax in Victoria is my husband and I own 50% each of our IPs. Our combined value is over the threshold so we must pay ... but my 50% is not and my husband's 50% is not.

 

[wategos]

The ATO created a generous allowance called depreciation. It runs at about 2.5% of the building value (it essentially equates to how much you should either be spending annually or putting aside annually to keep your property in the condition it was built, if not it is deteriorating and will require greater maintenance at some point in time

Exactly, which amounts to 7.5K a year on a 300K building value.
I doubt many are paying that much in maintenance but a minimum of 1% (3K) a year should be budgeted to avoid nasty shocks in the future, even with new houses.