OMG! Victorian State Land Tax 2011-2012

Oh, My God!

What have I done to offend You!

Australia Post delivered the Victorian State Land Tax Assessment for 2011-2012 today.

Please excuse me for a while. I will need to have a Bex, a cup of tea and a good lie down.

OMG!

Truly, I am left gasping.

(groan)
Kristine
 
Oh, My God!

What have I done to offend You!

Australia Post delivered the Victorian State Land Tax Assessment for 2011-2012 today.

Please excuse me for a while. I will need to have a Bex, a cup of tea and a good lie down.

OMG!

Truly, I am left gasping.

(groan)
Kristine

I'm joining you as well, Kristine. Mine arrived today too! Wooooo. Mine came in much higher than I had calculated! Yikes!!!
 
So what amounts or percentages are we talking about?

We owned property in Vic for about 3 years and I can't remember going into shock when the land taxes arrived.
 
So what amounts or percentages are we talking about?

We owned property in Vic for about 3 years and I can't remember going into shock when the land taxes arrived.

I worked mine out according to the calculator before my bill arrived. However, the land values have been increased to reflect the rise in values, meaning that my calculation was way out! Once you own over 1M in unimproved value, the land tax really takes off. Even slightly over 1M means that you are up for another .8% on any amount above 1M. It can really add up. Owning over 3 M in unimproved value means you are up for $24,000 and counting!!

Certainly demonstrates a valid point for spreading investments across a number of states.

Here are the current Victorian Land Tax Rates.

http://www.sro.vic.gov.au/sro/SROna...0442101-C580F3A333F4AD44CA2575D10080AD1C?open
 
...We owned property in Vic ...QUOTE]

Owning one property won't do it.

Land Tax doesn't kick in until there are a few runs on the board.

Last year was awful, but this year is truly breathtaking.

Goes to show, values didn't suffer much in Melbourne during the GFC. I suppose we should be grateful for that.

Land Tax this year is about equivalent to Municipal Rates for each and every one of the properties - except the House Of The Third Age - the Tax on that is more than the Municipal + Water Rates + the Insurance combined!

(whimper, whimper, sob!)

Ah, well, I guess they must also be taxing the sand!

(whimper)
Kristine
 
Jingo

Never mind buying in other States - this is more to with the fetish for buying house & land!

Buying flats or apartments would mean you could get a lot more in numbers and value of property before being clobbered with the bracket creep!


Well, it has been my long term ambition to buy a nice, 1960s block of flats. The Land Tax bill may just be the tipping point for us. Ten flats would have a quarter of the Land Tax that an equivalent street value of four triple fronted cream brick veneers would cost us.

(sigh)

Seriously, I feel quite overwhelmed.

Urk
Kristine
 
it is a disgusting tax hey? very similar to stamp duty. It is a tax discriminating against a specific segment of the community... if you were a farmer they would be giving you handouts!

but hey - big picture guys... think of the tax bonanza whislt you sit back and count your capital gains :D In fact there should be a special tax on property owners... or how about we just deny your losses, that'd be good one
 
Jingo

Never mind buying in other States - this is more to with the fetish for buying house & land!

Buying flats or apartments would mean you could get a lot more in numbers and value of property before being clobbered with the bracket creep!

Yes, this is true - But there are Body Corporate Fees to pay on flats and apartments which can add up as well!

I wasn't meaning you should have bought in other States - more a comment for myself in the future!!


Well, it has been my long term ambition to buy a nice, 1960s block of flats. The Land Tax bill may just be the tipping point for us. Ten flats would have a quarter of the Land Tax that an equivalent street value of four triple fronted cream brick veneers would cost us.

Something like this perhaps? (Although there are only 6 in this block).

http://www.realestate.com.au/property-unitblock-vic-carlton+north-107231843



(sigh)

Seriously, I feel quite overwhelmed.

Urk
Kristine

mmm.
 
Jingo

Never mind buying in other States - this is more to with the fetish for buying house & land!

Buying flats or apartments would mean you could get a lot more in numbers and value of property before being clobbered with the bracket creep!

Urk
Kristine

dont be so sure about that.

they were kind enough to value the land content on my two bedroom apartment in elwood at $345k!!
 
Jingo

Never mind buying in other States - this is more to with the fetish for buying house & land!

Buying flats or apartments would mean you could get a lot more in numbers and value of property before being clobbered with the bracket creep!


Well, it has been my long term ambition to buy a nice, 1960s block of flats. The Land Tax bill may just be the tipping point for us. Ten flats would have a quarter of the Land Tax that an equivalent street value of four triple fronted cream brick veneers would cost us.

(sigh)

Seriously, I feel quite overwhelmed.

Urk
Kristine

Must of really bowled you for a sixer Kristine.
You are one chicken with their finger on the pulse. You didnt see/know it was comming?
So l am quessing that there has been a bit:eek: of an increase this year in the Vic land taxes.
Sure hope the wild west doesnt follow suit.
We just love being taxed to the max over here.:rolleyes:
Enjoy the Bex [do they really still make that stuff?]
cheers
yadreamin
 
but shouldnt these sought of costs be taken into account when determining viability of an investment.

One of the reasons i chose to invest in apartments is this very factor.
Ive still got a $2 million odd property portfolio and the land tax was squat.
 
Oh goody, mine shall be arriving in the near future also. :(

Kristine, I feel for you and all those who have multiple holdings in the one state and one entity (be it personal holding or strucutred in trust or Co, etc).

Jingo could probably write this post for me as he know's how much this impost fires me up. I have posted on numerous times about this and don't have time to go hunting for those posts right now, however aside from being the cost of doing business and that we should strucutre ourselves by way of entity (beware states with no entity threshold), divesting interstate has been the best thing I have done.

Further to this, get into boxes where the tenant pays this impost or at least helps fund it on a single holding basis.....thinking commercial (not retail) such as offices or industrial.

Last year I harvested one resi IP that had a land tax bill that was over 20 % of the rent. An ownership assignment error by Vic SRO also saw one other property have a land tax bill over 30 % of it's rent. Took them over 6 months to rectify. Meanwhile I paid so I would not be in default/arrears and they eventually corrected their error and reimbursed me the difference. Our SMSF has three holdings in Vic and also pays a not insignificant amount. :mad:

Why are we charged land tax? Because the state revenue offices can. It adds to their pool of funds to mismanage on the state's behalf. :rolleyes: In and of itself, it offers nothing but a money grab. If it were allocated on a single holding basis it would be more palatable. However, the more the merrier. The more proactive the greedy investor is to fend for themselves and their retirement and provide rental accommodation to tenants, the more exponential the punishment administered shall be. Bracket creep and jumping two tiers all in one year can be very overwhelming.

Also, as Bigtone mentioned, don't think blocks of units are more minimisationalist in thier attraction of this impost. Depends where they are and what the dirt is worth. And if they are strata'd and you own the lot.....watch out. The little bits of dirt added together are worth much more that the whole was before it was split to enable the sum of its parts.

Historically, it was a land tax to prevent land barons hoarding developable tracts of land in and around expanding metropolitan areas. Then it was kept and it was used to supposedly fund all sorts of war and post war repatraition efforts and so on the justifications go. Now it exists because like any paradigm , everyone is conditioned to pay it and so the state levies it to the investor or business owner who also owns freehold and the coffers are wide open and receptive to the cash grab.

This post wasn't meant to be as long as this.......but this is the bane of my investing journey. Much of my mail is still being re-directed, so I can hardly contain myself when I see those SRO window envelopes arrive in the next few days.

Spread the love around folks. A little bit here, a little bit there with interstate purchases and also some variety in entity holdings may help hedge the exponential pain of this impost. Like all things we cannot change............. Learn the rules and play by the rules to minimise these sorts of outgoings and levies. Benefit of interstate aside from land tax divesting is the exposure to different markets in different cycles. If I had my time again and know what I know now, I would have started the interstate strategy a lot sooner

Have a nice day everyone :)
 
Also got mine yesterday. After minor heart failure I realised that our PPOR (was an IP) was still listed on there. One thing that surprised me was they give you a lot less time to get the $ together this year, with the 1st payment due in about 3 weeks.

So, what do you do if wish to expand your portfolio in Vic? Set up a company or trust to hold each entity?
 
Back
Top