NSW Land Tax threshold

[thesuperman]

This may sound like a stupid question, but say for example 3 people were to hold real estate in their names personally in equal ownership, would the land tax threshold be $406k per person? Meaning if the land was worth $300k, then $100k would be apportioned to each of the 3 people's threshold?

What about if the property were owned in the 3 personal names as trustee for a "Fixed" Unit Trust, would the $406k threshold be applied to the trust, or would it be applied to the trustee, in this case the 3 personal names & be divided equally by 3?

What about if the trustee for a "Fixed" Unit Trust is a company?

If it's the trust that gets the threshold, could you just setup multiple "fixed" trusts to get a threshold for each trust?

 

[The Fence]

What about you have a good long squizz here.

It's all there in black and white with examples but basically, each "entity" is taxed on their combined ownership of property over and above PPOR.

So one entity could be for eg:
you and your wife

another could be just you alone.

have a dig around that site, it's sure to confuse but you'll get it eventually.

 

[Terry_w]

If it's the trust that gets the threshold, could you just setup multiple "fixed" trusts to get a threshold for each trust?

Not in NSW, this may work in QLD

 

[thesuperman]

What about you have a good long squizz here.

It's all there in black and white with examples but basically, each "entity" is taxed on their combined ownership of property over and above PPOR.

So one entity could be for eg:
you and your wife

another could be just you alone.

have a dig around that site, it's sure to confuse but you'll get it eventually.

Thanks, I've already looked at there but couldn't find any specific examples covering the different situations, eg. one person, two people, three people, trustee as personal, trustee as company, etc.

Since each "entity" could get a threshold, so you could hold 7 properties like this in individual names so each "entity" gets the $406k threshold, therefore not paying any land tax?

Husband - 1st threshold of $406k
Wife - 2nd threshold of $406k
Another family member - 3rd threshold of $406k
Husband & Wife - 4th threshold of $406k
Husband & Another family member - 5th threshold of $406k
Wife & Another family member - 6th threshold of $406k
Husband, Wife & Another family member - 7th threshold of $406k

What about "fixed" trusts, is it the trust that gets the threshold? Or it's the trustee that gets the threshold?

 

[jrc77]

My understaning is that in NSW it doesn't work like that ...

I get one threshold.
My wife gets one threshold.
Trusts/companies don't get a threshold, but a fixed trust effectively passed the land component on to the beneficial owner.

Eg.

Any IP owned 50/50 between my wife and I would have the land component split in the ownership percentage (so 50% land to me, and 50% to my wife).
A fixed trust owning an IP would have the land component split in the percentage of the units in the trust (so say 50% me, 25% a company and 25% some other random investor). The 50% goes on to my land component and uses my threshold (if there is any left), then land tax.
A discretionary trust owning an IP - sorry - no threshold. Landtax from first $.

Regards,

Jason

 

[Terry_w]

In NSW unit holders of fixed trusts are consider the owners of property for land tax purposes. s3A of the land tax manangement act from memory

 

[The Fence]

Thanks, I've already looked at there but couldn't find any specific examples covering the different situations, eg. one person, two people, three people, trustee as personal, trustee as company, etc.

Ahh, sorry have a look here and do browse much further into the site as it is coming from the horses mouth so to speak.

Also, you could ring them and put forward a few scenarios.

It is definately designed to confuse so that most folks go in boldly and get caught in the net. IMO that is....

 

[thesuperman]

Ahh, sorry have a look here and do browse much further into the site as it is coming from the horses mouth so to speak.

After reading this link, I want to check I understand correctly:

Husband gets a $406K threshold & Wife gets a $406k threshold. So if they hold 50/50 ownership of land(s) with value of $800k, they both would be under the threshold & pay no land tax.

A company is assessed in the same way as a sole owner unless it is related to another company. A related company can be assessed separately or assessed jointly with another company or companies to which it is related.

Where the concessional or joint concessional companies' total taxable land value does not exceed the premium rate threshold, but exceeds the general threshold, these companies are assessed at 1.6% of the taxable value above the land tax threshold plus $100. Each non-concessional company is then assessed at 1.6 per cen of their taxable value as it does not qualify for the threshold.

I am confused about this though, does a company get the $406K threshold or not? What is a "concessional company" & "non-concessional company"?

In NSW unit holders of fixed trusts are consider the owners of property for land tax purposes. s3A of the land tax manangement act from memory

What about if the unit holder is a hybrid trust & an individual holds "income" units? Or if the unit holder is a discretionary trust?

How about SMSF? Is is the members that personally get assessed for land tax? I believe SMSF gets the $406K threshold as it's a "fixed" trust?

 

[Terry_w]

What about if the unit holder is a hybrid trust & an individual holds "income" units? Or if the unit holder is a discretionary trust?

How about SMSF? Is is the members that personally get assessed for land tax? I believe SMSF gets the $406K threshold as it's a "fixed" trust?

The unit holders are considered the owners. Discretionary trusts and hybrids get no tax free threshold, natural persons do.

 

[The Fence]

After reading this link, I want to check I understand correctly:

Husband gets a $406K threshold & Wife gets a $406k threshold. So if they hold 50/50 ownership of land(s) with value of $800k, they both would be under the threshold & pay no land tax.

The way we understand it, and pay it BTW, is mr & mrs fence is one entity that owns property 50/50, with one threshold. So total land value is 800k then taxed on 800-406 = 394k

Mrs fence also owns another IP 100% so this is another "entity" with one threshold.
All land owned by mrs fence is assessed including that of the first entity (50% bits plus the 100% bit) and threshold applied then taxed with that wonderful adjustment applied at he end to make sure there is no double dip taxing.

Ring them with some scenarios or better still talk to an accountant.

Figures used above are examples not real figures.

 

[jrc]

The way we understand it, and pay it BTW, is mr & mrs fence is one entity that owns property 50/50, with one threshold. So total land value is 800k then taxed on 800-406 = 394k

Mrs fence also owns another IP 100% so this is another "entity" with one threshold.
All land owned by mrs fence is assessed including that of the first entity (50% bits plus the 100% bit) and threshold applied then taxed with that wonderful adjustment applied at he end to make sure there is no double dip taxing.

Ring them with some scenarios or better still talk to an accountant.

Figures used above are examples not real figures.

Excellent e ample

 

[thesuperman]

Thank you all for the comments.

The unit holders are considered the owners. Discretionary trusts and hybrids get no tax free threshold, natural persons do.

I presume a Pty Ltd company who is a unit holder of a unit trust wouldn't get a threshold as they are not a natural person?

Also, say a property is owned by a SMSF, are the members considered owners & the land tax payable pass onto all the members of the Super Fund?

 

[Terry_w]

Thank you all for the comments.



I presume a Pty Ltd company who is a unit holder of a unit trust wouldn't get a threshold as they are not a natural person?

Also, say a property is owned by a SMSF, are the members considered owners & the land tax payable pass onto all the members of the Super Fund?

A company could get the threshold, depending on a few things.

Supefunds do get the threshold (if complying).

 

[thesuperman]

A company could get the threshold, depending on a few things.

Would you please be able to go into more detail about these things? I'm curious about the company threshold.

 

[Terry_w]

Would you please be able to go into more detail about these things? I'm curious about the company threshold.

Check out the land tax management act