There is a really interesting fact sheet here which might be of interest to NSW investors.
http://www.osr.nsw.gov.au/sites/default/files/file_manager/ofs_lt06_1.pdf
To summarise (directly from page 2)
If A & B jointly own Property 1 with a land value of $800k, and Mr A wholly owns Property 2 with a land value of $100k, then land tax payable is:
$301.60 by Mr A
$0 by Mr B
Here is the interesting bit (not in the factsheet but this is what I think)... if A & B decided to buy Property 2 in a 99:1 split in favour of A, then by my reckoning A can't get the land tax deduction to prevent double taxation anymore.
Which means A owns $499k worth of property
and B owns $401k worth of property
So A pays land tax of $1492 pa
and B pays land tax of $0 still.
Which means that by buying in a 99:1 structure instead of 100:0 in favour of A, they had to pay almost $1200 pa more in land tax.
I am just discovering this now, having had set up all my IPs as 99:1 tenants in common... a setup less than optimal now that I am running into land tax considerations.
Would be interested to hear people's thoughts?
http://www.osr.nsw.gov.au/sites/default/files/file_manager/ofs_lt06_1.pdf
To summarise (directly from page 2)
If A & B jointly own Property 1 with a land value of $800k, and Mr A wholly owns Property 2 with a land value of $100k, then land tax payable is:
$301.60 by Mr A
$0 by Mr B
Here is the interesting bit (not in the factsheet but this is what I think)... if A & B decided to buy Property 2 in a 99:1 split in favour of A, then by my reckoning A can't get the land tax deduction to prevent double taxation anymore.
Which means A owns $499k worth of property
and B owns $401k worth of property
So A pays land tax of $1492 pa
and B pays land tax of $0 still.
Which means that by buying in a 99:1 structure instead of 100:0 in favour of A, they had to pay almost $1200 pa more in land tax.
I am just discovering this now, having had set up all my IPs as 99:1 tenants in common... a setup less than optimal now that I am running into land tax considerations.
Would be interested to hear people's thoughts?