Is land tax payable as a one off when you purchase a property or annualy?
land tax?
- Thread starter ronnieandkylie
- Start date
Annually....each and every year!
Annually for all states except the ACT, where it is quarterly. There is no land tax in the NT. You can minimise land tax by timing your purchase. See this post for detailed information.
http://www.somersoft.com/forums/showpost.php?p=356454&postcount=32
Steve
http://www.somersoft.com/forums/showpost.php?p=356454&postcount=32
Steve
In NSW the land tax rate for 2008 is 1.6 per cent (plus $100) on the combined value of all taxable land in excess of the threshold. This is a reduction of 0.1% on last year.
The NSW land tax 2008 averaged threshold is $359,000 unimproved land value, calculated annually by the Valuer-General as at 1 July preceding each land tax year. There are a number of exemptions, including PPOR and land used for Primary Production, Boarding houses, Low cost accommodation, Residential parks, including caravan parks, Non-profit organisations, Retirement villages and aged care establishments
I didn't think you could split the threshold between you and your partner.
Regards
Andrew
I could be wrong, but I believe that you each have a threshold, however jointly owned properties are counted (in full) towards both of you & not split between you. You can only double your threshold if you both own properties seperate from each other.
Land Tax Info
I just looked up the info on Land Tax:
http://www.sro.vic.gov.au/SRO/srowebsite.nsf/taxes_landtax.htm#2
Note that the PPoR is excluded, which is good news.
Skater, it appears what you're saying is true (not that I doubted it!), and I think the part where there are multiple properties owned jointly is where the threshold changes.
It seems that each "primary taxpayer is assessed individually after the the first property.
I just looked up the info on Land Tax:
http://www.sro.vic.gov.au/SRO/srowebsite.nsf/taxes_landtax.htm#2
Note that the PPoR is excluded, which is good news.
Skater, it appears what you're saying is true (not that I doubted it!), and I think the part where there are multiple properties owned jointly is where the threshold changes.
It seems that each "primary taxpayer is assessed individually after the the first property.
Annually....each and every year!
Cheer up Sailor....simply flick it straight on to the tenant and let them pay it, up front, 2 months before it is owed. Pop the funds into a short term money market and start making money out of the Land Tax bill.
Life's just grand ain't it.
BEWDIFUL....
Correction: ACT has no land tax threshold
Land tax is just like your mother-in-law, you don't really want it but it comes with the package. It sticks around until you sell the property (or divorce in the case of the mother-in-law !).
Don't be so negative. I've got a great mother-in-law!!
Land tax is tax deductible. Also, it is an indication that you are either wealthy or gaining increased wealth.
Time for a naive question or two from me Dazz...Cheer up Sailor....simply flick it straight on to the tenant and let them pay it, up front, 2 months before it is owed. Pop the funds into a short term money market and start making money out of the Land Tax bill.
Life's just grand ain't it.
BEWDIFUL....
How does one flick it onto the tenant in a resi property, where they have an existing lease?
Can Land Tax be included in a resi lease for next time?
I thought the inclusion of Land Tax in a lease might only apply to Commercial leases?
Not at all Sailor....all questions are good ones if you don't know the answer.
To the best of my knowledge, one cannot. The RTA's all around Australia strictly and expressly forbid it. The collective Tenant's Union got in during the drafting of this legislation way too early on this issue, magnificent negotiators that they are, for their side of the Leasing Contract. Trouble is Sailor, you are on the opposing side in this adversarial contract....and therefore it's 100% in your lap.
Your only defence against this impost is to purchase assets that don't fall under the RTA.
This issue Sailor only affects those folks who have significant holdings. If you have one or two or three average houses in suburbia.....no problem, paying Land Tax is a snip. Move on.
However, if you are going to become serious about investing, you'd better sit up and take notice, cos eventually this single issue, regardless of all of the tricks about investing interstate and buying in different entities, will grow to be a monster. Some of the annual Land Tax bills on our individual houses are greater than the annual rent received.
The SRO in your state isn't too interested in helping you on this issue, nor is the Tenant's Union. In WA we have a lovely law related to this issue called compounding...where they lump all of the Land together and charge you at the highest rate....marvellous stuff.
As above, to the best of my knowledge, no. See Tenant Union's handiwork in RTA legislation.
So did I. If your asset doesn't fall under the RTA, you are free to flick it on.
For us 4 years ago now, this was the one issue that forced us down the track we went down. I simply couldn't afford to keep purchasing houses, as the Land Tax bill was growing beyond ridiculous.
I remember reading Jan Somer's advice about Land Tax in one of her books. She said it was part and parcel of owning real estate and nothing could be done about it. It was small anyway and with a few regular $ 10 or $ 15 per week rent increases, all would be OK.
Well, we didn't find that at all. It became a monster for us, and when the Land Tax bill arriving every year was bigger than our rental income received, that's when we decided to ditch the strategy and try something else.
To use her investing analogy further, the Land Tax ingredient was so unpalatable, we were forced to stop baking cakes with her recipe.
Anyway, I'm sure you'll assess your own situation and make whatever adjustments you feel necessary.
Many thanks Dazz. I guess I'm at the stage where I think my next IP will be a comm one...small to begin with methinks.
There's been a lot of light industrial developments in Cairns recently (over the past 12-24 months)... lots of those concrete slab walls emerging to be brightly painted on the landscape. Some are just for lease, but many are for sale. I'm just keeping an eye on http://www.realcommercial.com.au at the moment and getting the alerts. Just becomming familiar with the lay of the land... so to speak.
Most of what I'm looking at is under half a $mill and there are some choice pieces of RE out there. Some of these "sheds" have a mezz floor which has been converted into living quarters. So not sure if they come under resi or comm?
Any advice would be most welcome please.
There's been a lot of light industrial developments in Cairns recently (over the past 12-24 months)... lots of those concrete slab walls emerging to be brightly painted on the landscape.
Some are just for lease, but many are for sale. I'm just keeping an eye on http://www.realcommercial.com.au at the moment and getting the alerts. Just becomming familiar with the lay of the land... so to speak. Most of what I'm looking at is under half a $mill and there are some choice pieces of RE out there. Some of these "sheds" have a mezz floor which has been converted into living quarters. So not sure if they come under resi or comm?
Any advice would be most welcome please.
Ah ha! Doing a search for Land tax and reading thru all the relavent posts this was the one question I had.
So it is possible to do this? Just keep the total investments in each state under the threshold?
What about holding the investment under different entities? does that work? or is it cost prohibtive?
Cheers
Yes
Yes
Yes
Cost being prohibitive, depends on just how many properties you acquire.
Cost for landtax for two of my properties (in same HDT) was $2800 pa. Because I rent one from this HDT, the total landtax then was calculated on the other property and that was under the threshhold.
but watch the family/discretionary trust!!
threshold applies for individuals, companies and hdt trusts but not family/discretionary trusts.
dt's get no threshold at all in nsw because the osr "cannot determine the beneficary of the income from the trust".
doesn't matter if your dt has no income either!
threshold applies for individuals, companies and hdt trusts but not family/discretionary trusts.
dt's get no threshold at all in nsw because the osr "cannot determine the beneficary of the income from the trust".
doesn't matter if your dt has no income either!
