Land tax
- Thread starter 1911naomi
- Start date
I beleive each state is different and is normally based on the value of land that is non PPOR.
For example, in Queensland the OSR (Office of State Revenue) states:
An Australian resident is a person who ordinarily lives in Australia. Residents may need to pay land tax if the total taxable value of the freehold land owned is $600,000 or more.
This land is assessed separately to any land the resident owns as trustee or as a director of a company.
Just check the equivalent website for each State.
Is that the land value, or the property value?
It's the land value. You get an annual valuation from a government department - can't remember its name. The Office of State Revenue uses that valuation to work out the land value of each individual property that is in your name.
You have 3 main types of holding: freehold ie there has been
a title granted & the land can be sold to others;
Leasehold ie you lease the land from another party ; or
Crown land which is owned by the government.
If the land isn't freehold then the lease will determine if land tax levied on the owner can be passed on to the tenant eg commercial property.
No. There are a number of reasons for this:
1. Given the amount of land tax we pay - we pay far more in rates for one property then we do for land tax for all of them. We therefore consider it to be a minimal cost, in the scheme of things.
2. Our business model doesn't work once you factor distance into things. As we have completely self contained properties, and do everything ourselves, having a property that isn't conveniently located for us wouldn't be practical. We only look at properties located between our PPOR and the Perth CBD, for this reason. It means if something needs to be sorted out/attended to, we can drop in and check it out on the way to or from work.
Land tax in QLD is actually quite high - higher than council rates once you reach the threshold. It's at least 1% when you get over $600k, and up to 1.75%. So that's $2.5 k+ a year on one modest house in Brisbane.
Spreading risk as jclegg says is also a good reason.
Well don't consider NSW the threshold is around $400k at a rate of 1.6% even more if you're in the land rich provisions - quite easy.
Funny, our experience is the exact opposite.
We consider Land Tax to be crucial in the assessment of purchasing a property or not.
In our scheme of things, ignoring Land Tax is about as wise as ignoring your legs when trying to run.
A very easy trap to fall into Dazz. Many resi/novice investors are dazed by the bright lights of double digit gross returns & forget about the bottom line.
