Land tax vic

[matto_]

Hi all.

Apologies if already been answered.

Just working through my tax.

Have my land tax assessment which had my property down as an investment as at 31 December 2012.

Moved into it mid February-hence now ppor. From this date no income hence can't claim tax back from ato , but still have to pay land tax for remainder of the year.

This doesn't seem right to me but state revenue office says it is the legislation.

Any thoughts/strategies.

Thanks.

 

[Scott No Mates]

Prove that you were living there on 31/12 and claim back the tax.

 

[matto_]

Prove that you were living there on 31/12 and claim back the tax.

Would require proving this to both ato and state Rev office.

Was hoping someone else had challenged December assessment ruling and for status of property changed part way through year.

 

[Terry_w]

In NSW it is assessable as of midnight on 31 Dec each year. VIC is probably similar. If it was rented out on this date then you would pay the full year's land tax - and should be able to claim this as a deduction.

 

[chrispy]

Terry

This is the case.

I sold a house with settlement 6th January but still had to pay the whole year Land Tax

Chris

 

[matto_]

Thanks for the responses.

The point I am trying to understand is whether or not the full land tax would be deductible or just the portion for when the property was rented out.

 

[Terry_w]

Thanks for the responses.

The point I am trying to understand is whether or not the full land tax would be deductible or just the portion for when the property was rented out.

The tax is levied on one date - so if the property was rented out or available for rent at this date then it would probably be deductible for the whole year - check with your tax advisor.

 

[Paul@PFI]

Deductibility

Terry-W is correct. ATO have been asked this many times. There is a nexus between the land tax assessment and the generation of rental income at 31 December. But it also requires review of the intended use by the buyer as a nexus event may not have occurred on that same date. If its their new home it wont be deductible. If buyer propose to rent it then it will be deductible.

The key message for buyers / sellers around December is to ensure the contract has terms which address delayed settlement and land tax. Happens all the time. A solicitor should check and advise on this before you sign the contract and finalise an offer price just like its it land subject to compulsory acquisition etc it should all be disclosed in the contract. Its something that can be a deal breaker just like buying a used car with 1 days rego to go v's another with 11.5months remaining. Caveat Emptor !!! Something no agent wants to tell you about. Trigger issues include if the seller has been registered for land tax or used prop for investment or the intended use of property. Can also be affected by different taxpayers thresholds.