$%#@!! Vic Land Tax

[Ms Jade]

I have up until this morning been quite OK with land tax. Not that you can LIKE being taxed, but I saw it as a cost of business, blah, blah, blah. This morning I finally received my 2008 assessment. It tells me that, despite the Melbourne median house price declining 9.7% from December 07 to December 08, my land values have increased over 40%!!! What the? Perhaps I am a property investment genius! How else could I out-perform the market by 500%? I predict that my call to the SRO this morning will be one of MANY they receive over the next couple of days as people get their assessments. The value owed is nearly double last years & we ain't talking loose change (not for me, anyway).
Apparently it must be paid anyway, regardless of the outcome of objections, which can take....wait for it.....up to 6 mths from lodgment. Now I apparently have to find data on the suburbs and comparative sales (I guess around December 08) to send them. Thing is, i will somehow need to convert this to a $ per sqm basis. I never thought I'd say this but thank god i don't have 30 properties. Arrrrrrghhhh!!!

PS. Before anyone tells me, I am aware now that I should have paid more attention to the rates notices & objected then.
PPS. Yes, i know that some suburbs have out-performed the market and it's possible that properties did have a gain last year...

 

[Collector]

land tax sucks!


But...... you say that the valuation has increased 40% over the past 12 months - you will proberly find that the tax you paid last year were based on a valuation dated up to 4 years ago.

In nsw properties (land) are not valued annually, The Valuer General provides land values to councils for rating purposes at least every four years. Land owners and lessees are issued with a Notice of Valuation informing them of their property’s new land value. Notices of Valuation are issued each time a new valuation is made for council rating purposes.


Your land value may have droped in the last 12 months, but over the last 4 years (or since the last val date) have increased by 40%


If you don't agree with the valuation you can always dispute it

 

[DanielG]

This is so funny considering I just posted a thread which highlighted my deep resentment towards this tax and instead of getting support, i got the 'its part of the cost of business' excuse. I think us Australians are just way too laid back and government takes advantage of us, they would never do this in france because there would be a riot. Unfortunately, a government that mismanages the economy will look for ways to rake in as much money as possible to cover deficits, and landowners are only some that are targeted.

 

[skater]

This is so funny considering I just posted a thread which highlighted my deep resentment towards this tax and instead of getting support, i got the 'its part of the cost of business' excuse. I think us Australians are just way too laid back and government takes advantage of us, they would never do this in france because there would be a riot. Unfortunately, a government that mismanages the economy will look for ways to rake in as much money as possible to cover deficits, and landowners are only some that are targeted.

Not funny at all. Land tax IS a cost of doing business. Like it or not, you are going to have to pay it, but in saying that you would be a fool to think that any of us enjoy paying it. Many seek out legal ways to minimise it.

I & many other investors would love to be rid of this rediculous tax, but the problem is that us "rich" Landlords that have to pay it are few & far between (if you only have one IP, most will be under the radar). We don't have the manpower to get rid of it.

 

[ianvestor]

Could this just be a case of catching up after increase-capping?

Example (amounts and capping rates are fictitious):

2005: Land 100k, tax $1000.
2006: Land 200k, but because of capping increase at 10%, tax is now $1100 not the expected $2000.
2007: Land 300k, tax $1210 (not $3000).
2008: Land 250k, tax $1331 ($%*@!! my land value has dropped but my tax has increased!).

But tax still has to 'catch up' to $2500.

Edit: Sorry, looks like I mis-read the original post, which states land value has increased, not dropped.

 

[boomtown]

My Brisbane City Council rates notice has stated that the land value of one of my IPs doubled in 2008.

 

[LynnH]

Ouch, boomtown! What suburb, if you don't mind me asking???

Cheers
LynnH

 

[Glucose]

Ouch, boomtown! What suburb, if you don't mind me asking???

Cheers
LynnH

Trouble is, the unimproved land value as decided by the Dept of Natural Resources and quoted on your rates notice, bears little, if any, relationship to the MARKET value of your property.

 

[LynnH]

Yes, am aware of that, Glucose - I was more concerned with the potential 'hit' to the hip-pocket nerve when the council levies the rates!

Cheers
LynnH

 

[Dazz]

it must be paid anyway, regardless of the outcome of objections

If the legislation says that, all I can suggest is that you are on the wrong side of the legislation.

 

[BillC]

A way to minimise land tax is to by Ips in other States and to spread them in each state 2 in Brisbane 2 in Sydney 2 in Melbourne and so on

There are always ways to minimise tax legally

Bill

 

[boomtown]

Land value apparently doubled in Kangaroo Point in 2008. This is on top of a 30 percent rise in 2007.

So that's 160 percent in 24 months.

 

[nonrecourse]

A way to minimise land tax is to by Ips in other States and to spread them in each state 2 in Brisbane 2 in Sydney 2 in Melbourne and so on

There are always ways to minimise tax legally

Bill

And State governments are always revising their approach so that you continue to pay a disappropriate amount of tax compared to the "average person who will depend on the government to provide him with a pension.

A good example in Victoria is the penalty you pay if your property is held in a trust. This use to be a legitimate way to minimise tax legally.

NR