Ways to minimise land tax?

From: Manny B


Howdy all,

many IP investors including myself are facing increasing land-tax bills due to properties being purchased under individual tax-payer names OR a trust/entity... Many state that the way around paying too much land tax is to create multiple trusts/entities, each with an X amount of properties, others have indicated that they buy in multiple states (as the tax is state based) to avoid this, is there a better way? (I intend to also ask my accountant when I see him soon)

Can any forum members tell us how they go about reducing land tax?

Cheers,

Manny.
 
Last edited by a moderator:
Reply: 1
From: Michael G


Hi,

I've heard that Steve McKnight's wrap pack answers this problem for wrappers, but I've never read it, so don't know myself. Heard that on McKnights forum.

Michael G
 
Last edited by a moderator:
Reply: 2
From: Always Learning


In QLD, a trust is land tax free until 100K (of unimproved land value). Thus it would appear to be a simple case of creating multiple trusts each hold a small set (sub 100K land value) of IPs. However I would think this is too simple and too easy to do and hence I would expect that this loophole would have been shutdown.
 
Last edited by a moderator:
Reply: 2.1
From: Tibor Bode


Also in QLD the threshold for individuals is $200K, but effectively it is $221K as under $100 they don't send out the bill. Buying mixture of townhouses and houses can also help. It reduces your growth (land appreciates etc) but your land tax limit will be OK. In NSW you can buy in separate names (I mean huby and wife), but as far as I know it does not help in QLD.
This is definitely an issue for long term investors as sooner or later having multiple properties will hit the limit (except if the State Governments will overcome their greed for this absolute inefficient tax grab, which somehow I would not be relying on), so some planning in advance is very advantageous. Different states, different names and even different countries! NZ does not have lots of the garbage taxes we have and there is no CGT either if I remember correctly, but not sure about it.

Tibor
 
Last edited by a moderator:
W

WebBoard

Guest
Reply: 2.1.1
From: Will G


Land tax is payable on every IP in the ACT regardless of the value.
 
Last edited by a moderator:
Reply: 2.1.1.1
From: Alan Hill


Manny,

Only a slight minimisation I know, but if you pay your Land Tax in NSW(to OSR) as a full payment within 30 days a 1.5% discount rate applies instead of the 1.7%.

I realise you were probably looking at some more 'significant' minimisation strategies, but I just thought I'd mention it out of interest.

Just for general information, in NSW, the tax-free threshold for 2002 is $220,000. Up from $205,000 in 2001.


:)
 
Last edited by a moderator:
Reply: 2.1.1.1.1
From: Manny B


Howdy all,

thanx for your responses... I will be speaking to my accountant in the next couple of weeks (will do my taxes early this year to get a handy refund) & I will see what he has to say about this (ie. whether we can look at structuring our future purchases in another way), as he should know as he has many IPs (inc. shops, houses & even carparks)... I will make public what recommendations he makes to me (in case it can help anyone else)...

Cheers,

Manuel.
 
Last edited by a moderator:
Reply: 2.1.1.1.1.1
From: Yuch .


I thought a trust doesn't have that $200k threshold....


Regards
yuchun
~ The secret to success is to start from scratch and keep on scratching. ~
 
Last edited by a moderator:
Top