Where to buy versus land tax

Back to the drawing board again.

Am looking into
Toowoomba due to ok yields and airport going up etc, (good capital growth for equity but then our stretergy is buy and hold so yield is important)
Logan area due to great yields low prices
Clonatrf near brisbane - just started looking into this area as close to Bne, good prices, close to a bay etc
South of Gold Coast border - Tweed - due to being close to gold coast yet prices are much cheaper

Went through the whole debate of land tax last time i was buying around 6m ago and decided to buy in qld anyway as good rent.

Now I just cant justify buying in qld again - i am comfy with buying in qld as i can easily visit the areas, do minor renos if needed, husband works around the areas so easier to see the bad/good areas, brother in law lives and developes in toowoomba (unfortunately i cant afford to do this) seems to be options of capital growth and ok rent
BUT if land tax was say 1% roughly then on a $300k property and land val was $150 still paying $30 approx pwk in land tax, i am already up in the threshold and paying Land tax for other properties but considering its hard enough to find positively geared property getting another $30- pwk extra in rent to cover land tax would be even harder.

So what does everyone do ?

Could buy in Tweed area something cheap mid $200's to low $300's with $10-$15k reno rent $350 ish (not great yield like logan).

could take awhile for something decent in this price range to come up but atleast then we are only 10 mins drive away so easy reno and there are alot of nicer areas in tweed (aswell as the bad) and hopefully some equity asap from it.

How do you find out what the plans for areas are in the future - i looked on the tweed council site but cant seem to find - re improvements etc

anyway this is my ramble of what i have been thinking for the past few weeks once we decided we would buy again......... any opinions or advice would be great as im starting to get a headache.

Also I am due for my first baby in 2 weeks so if anyone would like to reassure me labour is easy that would be great too :)
 
Hi 1911naomi,

I'm in a similar situation and already own 3 apartments on the Gold Coast and want to purchase another BUT I'm worried that the land value will exceed the $600,000 threshold and will have to start paying land tax, or i can purchase in Tweed but the rental yield are much lower.

The biggest issue I'm having is how do you find land value on Gold Coast strata units? it's not on the council rates bill like other areas:mad:, I've tried google and all i can find is https://www.osr.qld.gov.au/land-tax/liability-land-tax/index.shtml

LVA value

The LVA value is:

determined by the Department of Natural Resources and Mines (DNRM)
the value applied to the land under the Land Valuation Act 2010 (LVA).

As the LVA value of land is determined by DNRM

Then you click on the DNRM link http://www.derm.qld.gov.au/ and you get nothing to do with land value.
I will call the DNRM tomorrow to try and get some info.

If anyone knows the answer it will be much appreciated but please do not speculate.
 
I did find something but have never received a valuation notice, i will call the Douchebags tomorrow.

http://www.dnrm.qld.gov.au/property/valuations/annual-valuations

What if I didn?t receive a 2013 annual valuation notice?

If you didn?t receive a valuation notice, the reason could be that:

your local area was not valued this year (see the list above)?in this case, your current valuation remains in effect until the next valuation is issued
your postal address changed and the Valuer-General was not notified?complete the change of address form or contact us as soon as possible
you own a unit?contact your body corporate, as a single land valuation is issued to the body corporate, not to individual unit owners (the valuation amount for each unit owner is apportioned by your local council for rating and the Office of State Revenue for state land tax, if applicable).
 
Guys/Girls,

TerryW already gave you the answer to your problem... trusts in QLD each can utilize a land tax free threshold. Investigate using a trust for the purchase!

Regards,

Jason
 
Thanks Jason for your reply.

I'm currently trying to research the pros and cons of being an individual owner or setting it up as a trust.

Also trying to research how land tax is calculated on individual units on strata titles, maybe the 3 apartments i own are only valued @ approx $80,000 each and total less than half the $600,000 land tax free threshold.
 
Guys/Girls,

TerryW already gave you the answer to your problem... trusts in QLD each can utilize a land tax free threshold. Investigate using a trust for the purchase!

Regards,

Jason

Doesn't always work out better in a trust.

We got 2 Bris IP's under 2 separate trusts, combined land tax is just under 8k.
If these 2 properties were both purchased under my personal name, land tax would be just over 4k.
Threshold is much lower for trusts and rates for amounts above threshold are higher.

Set up and management fees of trusts also have to be considered.
 
Thanks Ace in the Hole.

Are your properties houses or strata title?

Our government creates all sorts of complex tax issues when investing, really pays to research before buying and to make things worse it varies state by state:mad:
 
Thanks Ace in the Hole.

Are your properties houses or strata title?

Our government creates all sorts of complex tax issues when investing, really pays to research before buying and to make things worse it varies state by state:mad:

One property is 5 townhouses strata titled, land is 5 x 100k.
The other is currently a single site at 475k, which will be 6 strata townhouses in about 1 month, will probably be 6 x 100k.

When this 2nd development is finished, land tax under a trust will rise by another $2,125.
If it were under a personal name, it would right on the threshold.

The totals would then be $10,000 for trusts vs $6,000 in personal name.
So the difference of 4k is basically the same.
Once you get over a combined 1 mil in land component, the personal rate for land tax above the threshold gets very close to the trust rate.
However, the premium payment for trusts is always higher, which has to be paid every year you hold the properties.
 
Thanks Ace, land tax is a joke.

From what i now understand with apartments is that they do a land valuation every year and divide it by how many lots.

Example:Land value $4m divided by 120 lots = $33,333 per lot.
But what if someone's apartment is 160sqm and another is a studio at 40sqm, maybe this is calculated too like contributions to strata fees.

The pic I've attached is where i have one unit and i have no idea what they value it at, could be anywhere from 10 million to 80 million and from what i now know they over estimate big time.:mad:
 

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It's not that bad in the big picture, quite irrelevant really, unless your cashflow is super tight.

My calcs put land tax at just over 0.15% of property valuation.
i.e. 1/6 of 1%.
Would be less if under personal names rather than trusts.
Doesn't take much capital growth to blow that away.

This will change slightly depending on the type of properties you have and total value.

I really think a lot more focus/attention is required on other details, aside from land tax, just accept it.
 
Cheers for all advice - I have a trust set up so will look at using for next purchase. Anyone know what threshold for trusts in qld is?

Also what are people's opinions on the areas I mentioned?
 
Taxable value Rate of tax
$0?$599,999 $0

$600,000?$999,999 $500 plus 1 cent for each $ more than $600,000

$1,000,000?$2,999,999 $4,500 plus 1.65 cents for each $ more than $1,000,000

$3,000,000?$4,999,999 $37,500 plus 1.25 cents for each $ more than $3,000,000

examples

1. Taxable value of $680,000

Tax band is $600,000?$999,999

Tax calculation = $500 + (1 cent ? $80,000 excess)

= $500 + $800

Tax payable = $1,300



2. Taxable value of $6,400,000

Tax band is $5,000,000 and over

Tax calculation = $62,500 + (1.75 cents ? $1,400,000 excess)

= $62,500 + $24,500

Tax payable = $87,000

https://www.osr.qld.gov.au/land-tax/about-land-tax/land-tax-rates.shtml
 
Made some calls today to find out the land value my strata unit as above (see pic)

Land value FY ending 2013 $9.5m
2012 $10.5m
2011 $13m
This is to be averaged over 3 years



Contribution Entitlement can be found on the water rates notice on the 2nd page which is 97 of 8000.

Calculate 97 divided by 8000 x 97= 1.17%

Not sure how to calculate the rest.

Amount of lots on the land is 102

They told me my share comes to $115,000.

Now i need to calculate my 2 other properties.
 
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