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

Discussion in 'General Property Chat' started by Richard Williams, 13th Mar, 2016.

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  1. Richard Williams

    Richard Williams Buyers Agent - Southeast QLD Business Member

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  2. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    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.
     
    Last edited: 13th Mar, 2016
  3. Bullion Baron

    Bullion Baron Well-Known Member

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    "..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?
     
    Last edited: 13th Mar, 2016
  4. Gockie

    Gockie I'm an ISTP-A female, so I might be a bit quirky! Premium Member

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    Better as a PPOR only.
     
  5. Bullion Baron

    Bullion Baron Well-Known Member

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    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.
     
  6. Richard Williams

    Richard Williams Buyers Agent - Southeast QLD Business Member

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    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..............
     
    Last edited: 13th Mar, 2016
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  7. Bullion Baron

    Bullion Baron Well-Known Member

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    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...
     
  8. Richard Williams

    Richard Williams Buyers Agent - Southeast QLD Business Member

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    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%.
     
  9. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    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.
     
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  10. Scott No Mates

    Scott No Mates Well-Known Member

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    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?
     
  11. WattleIdo

    WattleIdo renovating Premium Member

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    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?
     
  12. fumid

    fumid Well-Known Member

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    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.
     
    Last edited: 13th Mar, 2016
  13. Scott No Mates

    Scott No Mates Well-Known Member

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    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.
     
  14. fumid

    fumid Well-Known Member

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    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?
     
    Last edited: 13th Mar, 2016
  15. Scott No Mates

    Scott No Mates Well-Known Member

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    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.
     
  16. WestOz

    WestOz Well-Known Member

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    "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.
     
  17. fumid

    fumid Well-Known Member

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    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.