Received land tax bill for NSW - $4K for 2 years!
- Thread starter babushka
- Start date
The problem is that NOT all landlords are in the same situation.WillG said:
Most landlords only hold one investment, and most do not use trusts. It is, like always, the fact that the tax falls to the "Asset Rich" who are trying to provide for themselves. At least the way it was done last year was a little more fair as everyone who held IP in NSW had to pay Land Tax.
Hiya,
For what it is worth, I attended a CPA seminar a short while ago.
There, it was revealed that while the SRO are encouraging all trusts to nominate / notify a beneficiary for land tax purposes in Victoria, this will not always get the best result. You could actually end up paying more land tax than otherwise if you blindly follow their instructions.
This is apparently due to the aggregation effect if the beneficiary owns enough property in their own name as well.
More often than not, you will be better off to nominate / notify, but, you should still do your sums first.
I am still in the process of designing a spreadsheet that should give an idea of which way is the preferred option. I'll let you know once it is ready for use.
Cheers
James.
For what it is worth, I attended a CPA seminar a short while ago.
There, it was revealed that while the SRO are encouraging all trusts to nominate / notify a beneficiary for land tax purposes in Victoria, this will not always get the best result. You could actually end up paying more land tax than otherwise if you blindly follow their instructions.
This is apparently due to the aggregation effect if the beneficiary owns enough property in their own name as well.
More often than not, you will be better off to nominate / notify, but, you should still do your sums first.
I am still in the process of designing a spreadsheet that should give an idea of which way is the preferred option. I'll let you know once it is ready for use.
Cheers
James.
I wonder whether the current land tax situation although unrelated, will have a similar market effect that the abolution of negative gearing had in the eighties. That caused a lot of investors to flea the market and rents went through the roof.
It would also be interesting to know what % of investors were imediately affected by that change in tax laws contrasted with the % of investors affected by the current land tax laws. Then we may start to see a clearer picture of the future market place.
Simon
It would also be interesting to know what % of investors were imediately affected by that change in tax laws contrasted with the % of investors affected by the current land tax laws. Then we may start to see a clearer picture of the future market place.
Simon
Client Envelopes
As a client of the NSW Govt I feel Sooo Proud to have received a number of envelopes in the mail today
I have not opened them yet. Owing to the multiple other envelopes stacked above.
Council Rates, Telstra bill, Optus mobiles, Gas bill, Integral Power Bill, GIO Insurances, Car Rego, Green Slip, School Fees, Re-furbishment accounts, Painter, Tiler, Carpet, Blinds etc. Lawn mowing, cleaning, turfer, loan application fees. Govt stamp Duty on loan, early exit bank penalties, Mastercard account, Internet access, Cable TV, school clothing.
Along with last quarters GST and a Bit of Capital Gains tax owed from last year. Plus last weeks grocery bill. And that luxury item One bottle of Michenbury from Dan Murphy's @ $3.95.
OK I shouldn't spend that much on myself
But I am sure excited about opening them envelopes tomorrow. Then looking for a job to cover my investments.
Perhaps selling up. Burying the $$. Running mastercards to the hilt & going bankrupt and onto dole would give a better lifestyle
Gee Cee
As a client of the NSW Govt I feel Sooo Proud to have received a number of envelopes in the mail today
I have not opened them yet. Owing to the multiple other envelopes stacked above.
Council Rates, Telstra bill, Optus mobiles, Gas bill, Integral Power Bill, GIO Insurances, Car Rego, Green Slip, School Fees, Re-furbishment accounts, Painter, Tiler, Carpet, Blinds etc. Lawn mowing, cleaning, turfer, loan application fees. Govt stamp Duty on loan, early exit bank penalties, Mastercard account, Internet access, Cable TV, school clothing.
Along with last quarters GST and a Bit of Capital Gains tax owed from last year. Plus last weeks grocery bill. And that luxury item One bottle of Michenbury from Dan Murphy's @ $3.95.
OK I shouldn't spend that much on myself
But I am sure excited about opening them envelopes tomorrow. Then looking for a job to cover my investments.
Perhaps selling up. Burying the $$. Running mastercards to the hilt & going bankrupt and onto dole would give a better lifestyle
Gee Cee
OK everyone is moaning about the land tax.
Lets get proactive and petition whoever we need to. Between us we have the resources to do it ie: legals to draft the petition, numerous websites to hold the petition and advertise it. A PR person to get it out there...?
Everyone can email it to every single person they know that is adversely affected by land tax.
Lets see if we have any weight!
Lets get proactive and petition whoever we need to. Between us we have the resources to do it ie: legals to draft the petition, numerous websites to hold the petition and advertise it. A PR person to get it out there...?
Everyone can email it to every single person they know that is adversely affected by land tax.
Lets see if we have any weight!
the whole lot, however the development property values make up about 30% of the total assessment.
What really annoys me is that the development stuff that we've just been taxed on is not generating any income at the moment, and is costing a bomb in fees (we've already paid over $200k on taxes and other govt BS), and we're going to be taxed to the hilt again once it's completed and sold off.
It's just another way our govt is double dipping to line their own pockets.
I have real problems paying land tax. If properties generate income, we're paying income tax. If the properties are not generating income (as in our case with our development, and any other person who owns vacant land), then how the hell doesn someone get the money to pay for this tax?
It's just madness!
What really annoys me is that the development stuff that we've just been taxed on is not generating any income at the moment, and is costing a bomb in fees (we've already paid over $200k on taxes and other govt BS), and we're going to be taxed to the hilt again once it's completed and sold off.
It's just another way our govt is double dipping to line their own pockets.
I have real problems paying land tax. If properties generate income, we're paying income tax. If the properties are not generating income (as in our case with our development, and any other person who owns vacant land), then how the hell doesn someone get the money to pay for this tax?
It's just madness!
It is madness- a type of govt insanity that will affect the future property market much more than many people realise.
It doesn't take much to get over the threshold; even holding as an individual (never mind trusts), a run-of-the-mill investor only needs to hold something like two ordinary 3 bed homes on 700sqm blocks out in the suburbs around me to be up for a $9K land tax bill this year. And wait until next yr, and the next..........
It doesn't take much to get over the threshold; even holding as an individual (never mind trusts), a run-of-the-mill investor only needs to hold something like two ordinary 3 bed homes on 700sqm blocks out in the suburbs around me to be up for a $9K land tax bill this year. And wait until next yr, and the next..........
JoannaK said:
Hi Jo,
Even though our Land Tax bill is not too bad the other holding costs are just getting beyond the joke as well not to mention the work and hassles associated with IP ownership.
Over the next 10 years we will be progressively (depending on market conditions & tax situation) disposing of all our property and replacing them with quality, dividend paying stocks with an emphasis on LIC's and Listed Index funds etc to keep risk low and minimise stock selection decision making. Property just seems to becoming a Cash Cow for Local & State Govt's not to mention that one feels at times they are employing a small workforce of tradespeople and Propery mgrs etc.
If I feel the urge to own property I will opt for a listed Property Index fund (not residential) which pays a much better yield generally than residential property. Couldn't give a stuff about Capital gain comparision as I'm aiming to be a long term, buy & hold investor with an emphasis on growing a passive income stream with minimal effort.
Well chosen income producing Shares or share funds (preferably listed) on the other hand are free of the hassles mentioned above relating to property. No fees whatsoever except a rediculously small amount of brokerage. And having them in a trust doesn't incurr discrimination like Land Tax with property held in a trust. Then just retire to the beach, forget about it all and smile every six months when all the dividend payments flood into your, Trust or SMSF account.
Please note I'm not trying to start another Shares Vs Property debate. This is just my personal decision based on a few years research and soul searching.
In fact I hope that not too many people are actually thinking the same way as me because I need to sell our property to someone.
Regards - Gordon
Gordon,
Sorry what you have posted up there is exactly what we are thinking and we hope to do it quicker than your 10 years timeframe .
We think we will keep our relatively expensive PPOR for good CG but free from CG & land tax (hope they won't change the rule and tax on our PPOR as well) , deposit for ONE or TWO nice smaller cheaper IPs potentialy for us to move to when we are older and want to downgrade.
The rest goes into bluechips with good dividents. Then we will see you at the beaches......
salsa
Sorry
what you have posted up there is exactly what we are thinking and we hope to do it quicker than your 10 years timeframe . We think we will keep our relatively expensive PPOR for good CG but free from CG & land tax (hope they won't change the rule and tax on our PPOR as well) , deposit for ONE or TWO nice smaller cheaper IPs potentialy for us to move to when we are older and want to downgrade.
The rest goes into bluechips with good dividents. Then we will see you at the beaches......
salsa
salsa said:
Hi Salsa,
We have 4 properties in Qld but fortunately due to good luck rather than good planning we have avoided land tax. Ownership is spread across me, my wife, DT & HDT. Our HDT sunshine coast IP looked like getting slugged this year but the threshold was raised and we just scraped under the top limit.
I'm just hoping this sort of luck continues until we have disposed of them all in the years ahead as mentioned in my above post. Although it is highly likely we will keep the Sunshine coast property as future PPOR. Fortunately here in QLd you don't pay land tax in a trust if it is your PPOR.
Cheers - Gordon
Hi salsa.salsa said:
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).
Regards
Marty
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
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
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