$400/week land tax - Sydney unit...

$400 a week land tax on one Sydney unit

'Would I do it again? Probably not'

 

Wow..... and here I am thinking land values on units are low..... the question of "where" (and how many other units are on the block of land) makes all the difference.

 

"..it would have been better to put it in the bank and leave it.”

My BS detector is going haywire.

He thinks due to property expenses they would have seen cash outperform an almost 6x increase in the value of the apartment?

 

Better as a PPOR only.

 

Most properties would be if you avoid land tax, CGT, etc. But his claim that cash in the bank would have outperformed his investment is ludicrous.

 

I haven't done the full calc and I'm not sure what the average bank interest rates would be for the last 18 years but an initial deposit of 380k compounding over 18 years at 6% is $1,115,971 (very rough estimate @6%)

He sold for 1.78 if you deducted annual land tax and strata levies and rates and water and maintenance/refurb costs and agents commissions and special levies and stamp duty/legals and selling commission and his time and effort on the strata committee over 18 years I wonder how much difference there would be. Also there are no tenant issues with cash and dealing with silly strata committee's..............

 

Purchase price was $305k.

Add rental income (before taking away costs).

Tax on profit calc'd on only half gain, tax on interest would take away from your compound growth calc.

Also would question your 6% interest rate...

 

The article is confusing, under the video it says this:

Bought for $380,000, sold for...
Ian Macdonald and his wife bought this investment unit with a view back in 1998. What did it fetch at auction?

Then further down it says:
Ian Macdonald bought the apartment with his wife as an investment in 1991, paying $305,000.

Anyway according to google the average rate from 1990 was 4.95%.

 

And were there any renovations done to the property?

Also keep in mind that he may have just put down 10% deposit so he had the benefit of leverage which you wouldn't get with money in the bank.

 

It broke my BS detector when Mrs No Mates read it out. $20k land presupposes land content of over $1.6m

Cry me a river.

BTW how much rent were they collecting?

 

And the amount over reserve covers more than half the land tax (which, admittedly, is ott).
The PPOR must be pretty nice - who wouldn't want to downsize into that flat?

 

Land tax | Office of State Revenue
NSW, Tax year 2016,
Threshold Rate $482,000

Do I need to register for land tax?
If the total value of your taxable land is greater than the land tax threshold, you will need to register for land tax.

The questions is: how do I know if my lands value is over $482,000 or not?

QLD: total taxable value of their land is $600,000 or more.

 

You register for land tax or run the risk of paying penalties.

The LPI sends you an annual letter advising the value and it is also on your rates notice.

 

Thanks, so even your land maybe valued <$482,000 or close , you registered to see what's the valuation from tax office?

it is also on your rates notice-you mean council bills?

 

Council rates notices.

The LTO writes to you annually to advise the land value of each property that you own. You need to add this up if you are at or near the threshold.

 

"The Cronulla-based engineer will not purchase a residential investment again but said he will buy into commercial real estate instead."

"Perhaps" he was fed-up with all that's required with residential, very minimal with commercial, tenants responsibility?
I often consider this.

 

Thanks Scott, I've sort this out, here you can check NSW land value,
Access land values - Valuer General of New South Wales
and the land value there is different from land valuation from the bank lol.