Not another Land Tax thread....

[natmarie73]

Dear all,

Just as an aside to all the threads about land tax. Considering the impact it now has on cashflow is anyone thinking about changing their investment strategies to compensate for this tax? It would be highly unlikely that any state govt will increase thresholds or reduce the scales by very much, and as such it looks as if it is something we will all now have to live with.

I am interested in hearing if anyone is considering changing their investment strategy, and what changes/alterations you are thinking of.

Maybe those who invested in property when negative gearing was scrapped might have some insights for us newbies who now have to deal with goalposts being shifted left, right and centre.

Cheers
Nat

 

[Patosan]

For some time I've thought that even though I know my area well it wouldn't be wise to buy more there ... in the same state. Next purchaes should rather be interstate.

However who knows the future, perhaps the federal gov will want to have slice of this pie too, then even this action would not shield against the evil land tax. It is terrible isn't it, currently one could own a reasonably expensive IP in each state and pay zero land tax ... however if they're all in the one state then you'd be up for a huge bill. Effectively you'd be paying it for nothing ... in this example.

So yes it has made me reconsider the location of my IP.

 

[ralph wiggum]

I hope the govt. doesn't change the laws to get those of us who have spread across the states to negate the land tax bills.
At the moment it seems the best way to get around it. I have 2 in QLD, 1 in NSW and 1 in Vic.
The other option is to buy everything in the Northern Territory, where they have no land tax.

 

[Bricks & Mortar]

Dear all,

Just as an aside to all the threads about land tax. Considering the impact it now has on cashflow is anyone thinking about changing their investment strategies to compensate for this tax? It would be highly unlikely that any state govt will increase thresholds or reduce the scales by very much, and as such it looks as if it is something we will all now have to live with.

I am interested in hearing if anyone is considering changing their investment strategy, and what changes/alterations you are thinking of.

Maybe those who invested in property when negative gearing was scrapped might have some insights for us newbies who now have to deal with goalposts being shifted left, right and centre.

Cheers
Nat

Although I'm old enough to talk about the scrapping of Negative Gearing our investment portfolio didn't start until some six years ago so I can only comment on current investment strategies.
Our recent land tax assessment showed a 350% increase in price on three qld properties in Bundaberg. Admittedly they did look a little undervalued compared to the market price at the last assessment but we thought we'd be safe for a while and subequently bought in Townsville(150% rise).
We currently hold all titles in our own names, and all future purchases will probably be via a trust. Which allows for only one more in Queensland and a search into states other than Victoria as we are in the land tax threshold with one property there.
These probably aren't changes so much as decisions made well before the land tax came assessments came through. I guess planning ahead has been a downfall in the past (not having all the properties in the trust) but advise from our accountant is no longer gopsel and we tend to explore other avenues and advise form a variety of sources as no one person has the right answer.
The land tax issue, depite being a hardship for everyone on the forum (with properties) is a expense everyone knew was coming, Unfortunately it's a bit of a kick in the gut, how quickly it rose!
I'm sure everyone will look more closely to diversifcation into other states/NT/overseas to avoid further tax rises in the future

PS This Site is really great. Despite looking on for months I usually dont reply as someone has usually beaten me to the punch or has something better to offer.

 

[Bricks & Mortar]

Oh almost forgot!
What about the repercussions to the Rates bill
The councils will use the new valutions come June 30th.
Are we so see increase in rates to the same percentage and the land valuations?
Ouch!

One of our blocks in Bundaberg is a vacant acre block of land,
Looks like it time to start building!
Blast! should have converted it into the trust, but i guess the CG will be too high now.

cheers
Timm

 

[gekko_99]

I think all this land tax stuff works itself out over time, if you can affort to hang on. Investors get hit by the annual cost and sell then rental properties become more scarce so rentals increase to a point where yields go up and investors come back in. It won't happen over night but it must happen over time.

The state government made land tax non-recoverable by law in Qld on commercial leases. These properties are bought and sold on their yields and new stock won't be built until they stack up in a feasibility so in the end rentals go up. I'm sure its the same story for all property markets.

IMHO at the end of the day when governments tax investors the market moves itself around and finds a new equilibrium and generally its those who are renting that cop the short end of the stick.