Received land tax bill for NSW - $4K for 2 years!

[bobby]

[QUOTE

Although I live in Sydney, 5 of my I/P's are in Qld. 2 in Redland Bay, a unit in Beenleigh, 1 in redbank Plains and 1 in Collingwood Park,

All are under wife's,mine, or both names i.e no trust.

To date, have not heard from OSR (Qld), don't want to either, (probably just jinxed myself ).

We paid land tax last year on an I/P here in Sydney (typical).

Marty[/QUOTE]

Marty,

Same here. I have 5 in QLD. 3 X Currumbin, 1 X Northgate and 1 X Maryborough. I haven't heard from the QLD OSR and after paying $3543 LT on our property at Randwick here in Sydney I don't want to. Where is the incentive to own all this crap? CG, if it comes then you pay tax when you sell. Even if you buy and hold someone in your family will one day pay tax on the sale of the property...

Bobby

 

[Leandro]

Hello,

I dont currently own any IP's as its still very early in my investing journey, however until reading the posts from this thread i didnt know that Land Tax was such a big problem.

Surely, there are state politicians who also own IP's who would be in a similar situation? Wouldnt they be able to see the problem with the current taxing model?

Maybe im just young and naive

 

[austini]

Hi Gang,

In my case it is not so much a knee jerk reaction to holding costs etc. We've just decided that we want to take a more passive approach to investing and have less hassles in retirement. Plus for generating income the share & LPT dividend approach sits better with our investing personality.

I have known many older long term property investors over my lifetime including my father. Whilst they are relatively younger, owning property and getting involved in the process seems great. But in most cases my aging friends and acquaintences ended up selling their IP's because they found it was stress they could do without during the last stage of your life.

But at the end of the day it is just personal preference and for me the end result is to generate my income mostly from assets other than residential property.

No doubt someone will probably mention Living on Equity. Have looked into that in depth and it's not for me except as maybe a modest part of the overall income generation portfolio.

Cheers - Gordon

 

[Petal]

What are the threasholds in NSW for Land Tax?

I rang the OSR up here in QLD a couple of weeks ago to work out what my Land Tax bill might be this year.

We have recently had all our properties revalued by the Dept of Natural Resources and Mines (well dated as at 30 June 2005 which means that they count for assessing in the 05/06 F/Y)

As you might image the UCV's are quite a bit higher but Premier Beattie god bless him raised the threashold to $450,000 which includes your PPOR but then you can take that back off again. They also have this tricky thing called averaging over the past three years.

Add all of this together and I ended up being under the threashold which is great seeing our UCV of investment props is 495,000.(this was being one house I only own 50% of with hubby and one only 1%) so I really thought we were up for some dollars

Obviously next year we are up for some money, but the bottom line is the increase in the threashold is what saved us.

 

[markp]

Hang on a sec folks
Let's turn this around for a moment. Don't get me wrong I hate LT too but imagine the future benefit to those astute Property investors who ride this crap through the dark times. After the NSW gov finally realises they stuffed up big time being faced with major housing shortages and rents that have gone through the roof those who still hold property may well do very well in the wealth department.
Just a thought.
any comments?
Simon

You can trot out this investment bunkum but haven't you had a gutsful of working for tax collectors? Isn't it time we all said "enough"?
Property taxes are growing every year.
All we can do is recognise our moral duty and not only minimse but evade all taxes.

 

[Jacque]

What are the threasholds in NSW for Land Tax?

I rang the OSR up here in QLD a couple of weeks ago to work out what my Land Tax bill might be this year.

We have recently had all our properties revalued by the Dept of Natural Resources and Mines (well dated as at 30 June 2005 which means that they count for assessing in the 05/06 F/Y)

As you might image the UCV's are quite a bit higher but Premier Beattie god bless him raised the threashold to $450,000 which includes your PPOR but then you can take that back off again. They also have this tricky thing called averaging over the past three years.

Add all of this together and I ended up being under the threashold which is great seeing our UCV of investment props is 495,000.(this was being one house I only own 50% of with hubby and one only 1%) so I really thought we were up for some dollars

Obviously next year we are up for some money, but the bottom line is the increase in the threashold is what saved us.

Can you get Beattie to ring his NSW pal, Morris, for a chat? Sounds like the states have their thresholds around the wrong way

The current threshold in NSW is $352K. After this, we are taxed at a whopping 1.7%. Trusts fare badly (unlike Qld) as they pay tax from $0.

 

[simonjulie]

You can trot out this investment bunkum but haven't you had a gutsful of working for tax collectors? Isn't it time we all said "enough"?
Property taxes are growing every year.
All we can do is recognise our moral duty and not only minimse but evade all taxes.

Investment bunkum? Which part is bunkum?
I did say that I hated land tax too.
I don't plan on chucking in the towel. Governments can change. Policies can change and will when sufficient pressure is exerted. I said earlier, maybe from high rents and/or housing shortages.
Simon

 

[markp]

Investment bunkum? Which part is bunkum?
I did say that I hated land tax too.
I don't plan on chucking in the towel. Governments can change. Policies can change and will when sufficient pressure is exerted. I said earlier, maybe from high rents and/or housing shortages.
Simon

Yeah I'm not surprised you hate Land tax that's a disgraceful figure.

The investment bunkum I refer to is the notion that if there is a housing shortage crisis then somehow we landlords would profit from that situation.
You can sure that the government of the day would not let that happen and if it did then our properties would be confiscated.

cheers

 

[simonjulie]

Yeah I'm not surprised you hate Land tax that's a disgraceful figure.

The investment bunkum I refer to is the notion that if there is a housing shortage crisis then somehow we landlords would profit from that situation.
You can sure that the government of the day would not let that happen and if it did then our properties would be confiscated.

cheers

It has happened before as I sited earlier and for that reason, it could happen again(land owners profit from government stuff ups that is.)
As for governments not allowing a housing shortage to happen. From my understanding of the situation, the evidence is already there in Sydney and Canberra ie:Tight rental markets and shortage of public housing.
http://www.smh.com.au/news/national/rents-market-turns-into-a-scrum/2006/02/24/1140670269122.html
I rest my case
Simon

 

[Jacque]

When the threshold was actually abolished last time and the vendor tax was introduced as well, the then treasurer (Egan) received a hell of a lot of letters/faxes/emails from a standard "We hate land tax Mr Egan: please reconsider", sourced from the REINSW site.
I can't find a copy anymore (will keep trying by looking in their archives) but I'm sure someone else cleverer than me could, and post a 2006 version up here for us all to cut and paste and send off?
Just a thought.........

 

[Jacque]

Actually, after a quick search, I found it myself

Who's going to modify it for us? I've got kids coming home in 2 mins....plus two extras

http://www.reinsw.com.au/dir111/rei/Library.nsf/d4ee6eaa9176987aca2568ee0043f049/02ab0c0767ab120bca256e8600156c18/$FILE/LetterToMrEgan.doc

 

[markp]

It has happened before as I sited earlier and for that reason, it could happen again(land owners profit from government stuff ups that is.)
As for governments not allowing a housing shortage to happen. From my understanding of the situation, the evidence is already there in Sydney and Canberra ie:Tight rental markets and shortage of public housing.
http://www.smh.com.au/news/national/rents-market-turns-into-a-scrum/2006/02/24/1140670269122.html
I rest my case
Simon

Wipe that smile off your face Simon.

Can you blame the government for this so called "housing shortage". I don't believe there is a shortage. I mean you don't see people living on the street,well I don't anyway.

I wonder what the governments answer will be?
Dare I say it a rent freeze on resedential properties perhaps, oh boy then we will see a housing shortage, or as I suspect another hand out?

happy days

 

[markp]

Hey Jacque

Why is your last post 10 sizes too big?

 

[Jacque]

Hey Jacque

Why is your last post 10 sizes too big?

No idea but I'm guessing it's got something to do with the link I attempted to post? BTW, has anyone been good enough to change the letter to suit today's climate? Someone must have spare time.....

 

[geoffw]

Not much spare time... but here's the text if somebody wants to work on it

The Hon Michael Egan MLC
Treasurer and Minister for State Development
Level 33/ 1 Farrer Place
Sydney NSW 2000

Fax: (02) 9230 2859

Dear Treasurer,
NO ‘PROPERTY SELLERS’ TAX
RETAIN THE LAND TAX THRESHOLD

Like many Australians my self-funded retirement will be financed by hard work and long-term property investments. In one totally unexpected and outrageously unfair blow your proposed new taxes on investment property will not only erode my nest egg but perhaps see my retirement plan ultimately ruined.

Firstly, your proposed tax on property sellers breaches every principle of equity.

It is retrospective, so I was not able to factor the tax into my retirement plans and budget when I purchased the property. It also unfairly disregards the owners’ holding costs as well as expenses incurred improving the property and thereby contributing to its sale price. For most property owners a 12-15% margin between purchase and sale price will barely cover expenses incurred in buying, owning and selling a property, let alone constitute a “profit”. Therefore, owners who spend money improving the property, or who sell in less than ideal market conditions may find themselves making a loss in real terms.

Secondly, the decision to remove the threshold for exemption of land tax payments will also be a financial blow to property owners and tenants. Where possible many will pass the expense on to tenants. Alternatively, those obliged to absorb the extra cost will suffer additional hardship and be forced to withdraw the tax from their retirement savings.

As a landlord, investor and contributor to the wealth of this state I urge you to give serious consideration to these proposed tax changes.

Mr Egan, you must:
· Withdraw the proposed introduction of Vendor Transfer Duty, and
· Retain the land tax exemption threshold.

I look forward to your positive response.

Yours sincerely

 

[lizzie]

got my bill the other day for around $6000 - i hate land tax but resigned to the fact it is part of doing business in nsw ... and a high bill must mean i'm vaguely successful at it. the bit i really really despise is that in nsw there is no threshold for companies or trusts - we pay 1.7% from the first dollar.

so we do the right thing to protect our funds from the "almost" bottom dwellers (the bottom is the nsw government office) and get severley penalised for it. unfair!

tho i do wonder if the rental shortage is also in party caused by the mum/dad investors getting a land tax bill for the first time last year and squealing.