Join Australia's most dynamic and respected property investment community

Council taxes

Discussion in 'Accounting & Tax' started by Dean Collins, 11th Jan, 2017.

Tags:
  1. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    358
    Location:
    New York
    BTW thought some of you investors in Australia would get a kick out of this and make you feel better about some of your council fees.

    We just completed our New York coop’s expenses spreadsheet for 2016 to send to the accountant. (a coop is like a strata.....but over here the strata pays for city taxes...eg. Council taxes)

    Our 2016 NYC city coop taxes for a small 6 apartment building in Brooklyn Heights is now $41,455 a year or approx 64.3% of annual building running costs.

    :(

    Hope that brings a smile to your face next time you see $400 a qtr for your council rates.


    Cheers,
    Dean
     
    Perthguy, Scott No Mates and EN710 like this.
  2. MondeoMan

    MondeoMan Active Member

    Joined:
    20th Dec, 2016
    Posts:
    33
    Location:
    Melbourne
    I think they have it right in the UK, tenant pays the tax... after all its them using the services
     
    KayTea, JacM and D.T. like this.
  3. C-mac

    C-mac Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    895
    Location:
    Sydney
    Yikes!!

    Dare I ask, what kind of net % return dis tour NYC 6-pack of units achieve, after that whack of expense?
     
    KayTea likes this.
  4. mikey7

    mikey7 Well-Known Member

    Joined:
    30th Mar, 2016
    Posts:
    408
    Location:
    Sydney
    - Size of buildings?
    - Size of land?

    Could be mansions on a heap of land in a prime location..?
    You say 'small', but watching Million Dollar Listing NY.. an apartment thats 2100sqm (not sqft) is considered 'small' to some of their buyers.
     
  5. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    358
    Location:
    New York
    Sorry C-mac if I wasn't clear, this is my PPOR here in Brooklyn heights NYC.

    The 6 units are all owned separately.

    Mikey7, City Taxes aren't based on "potential" building sizes etc, its based on "as-is where is" (and based on rental returns for some arcane reason/not property value).

    As for size, the entire 6 apartments are 400sqm in total.....(4000sqft). Our particular apartment is a little bigger at 160sqm than the rest as we've done a combination but as you can imagine most of the other 5 are just studios etc.

    As for those interested in rental returns....pretty good article here in Curbed on what you can rent for $1750pw (though apartments in our building would probably rent for $2000pm).

    But like I said....this wasn't meant to be about ROI.....just wanted to point out about Australian council rates versus NYC city taxes.
     
    Perthguy and mikey7 like this.
  6. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,031
    Location:
    Sydney or NSW or Australia
    But what's included in the city taxes - more than just road, garbage, parks and pools. Does it.also fund/contribute to the NYPD/law enforcement, courts, fire brigade etc?

    Did you mean that rents are. $2000/mth ($500/wk) vs $1750/wk elsewhere?
     
  7. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    358
    Location:
    New York
    $1750 in the article is Per Month (for some reason I've never understood.....usa rents are always PM and Aust rents are always pw).

    interestingly if a tenant stays until the 2nd....and then moves out.....they are still liable for the entire months rent.

    its actually quite crazy because EVERYONE is trying to book movers on the 1st of the month......
     
  8. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    358
    Location:
    New York
    And yes I guess it covers everything the city pays for.......but kind of gets expensive when you figure out that my wife and I are paying $42per day personally......just to the city for these services....
     
  9. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,031
    Location:
    Sydney or NSW or Australia
    @Dean Collins - thanks for clarifying. So to compare apples for apples we (in Oz) need to add what we then pay in state taxes back into the equation - note that all of the GST collected goes to the states via the ATO, then add land tax, govt services levies etc and NY State looks cheap ;)
     
  10. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    358
    Location:
    New York
    Uhm....yeh nope.

    NY State and NY City have a sales tax.....

    NY State and NY City have an income tax as well.....

    :)

    Though don't feel too bad.....we can deduct our PPOR interest up to $1m mortgage from our federal income tax (though only get $500k capital gains free on our PPOR).[/user]
     
  11. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,031
    Location:
    Sydney or NSW or Australia
    It's all swings and roundabouts - where the opportunity to exploit the market exists, there are those who will step out of their comfort zone and invest in unfamiliar territory then the others follow until the market rights itself.
     
  12. Perthguy

    Perthguy Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    7,835
    Location:
    Perth
    In Australia there is no land tax on a PPoR, if we are comparing apples to apples ;)
     
  13. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    358
    Location:
    New York
    Yes but you have council taxes....and that was my original point.

    Anyway.....putting a fork in this topic, consider it closed and hope it was of interest to some of you :)
     
    Perthguy likes this.
  14. Gockie

    Gockie Be the change you want to see in the world Business Member

    Joined:
    18th Jun, 2015
    Posts:
    7,294
    Location:
    Sydney
    Thanks @Dean Collins. $40k in taxes to own a unit (albeit a double sized one) each year is a lot. It seems You have to be rich to own one in the first place, and then you have to be wealthy to keep it on an ongoing basis. No point in inheriting one and then trying to holding it if you can't pay to keep it.
     
  15. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    358
    Location:
    New York
    ugh people don't read :)

    $41,455 was all 6 units in the building.

    Not all paid by us.

    (maybe it wasnt making sense as I didn't explain.......and people are getting confused about my explanation around combination, there used to be 8 studios in the building but we combined 3 of the apartments into one so our portion of the $41,455 x 3/8 (eg we own 37% of the entire building)eg so around $1300pm for our apartment).


    ok...lets really put a fork in it :)
     
  16. Gockie

    Gockie Be the change you want to see in the world Business Member

    Joined:
    18th Jun, 2015
    Posts:
    7,294
    Location:
    Sydney
    Ok. Apples with apples. You are paying $3900 per quarter.

    In Sydney people typically pay up to about $1300 for strata and $280 to council per quarter. So up to about $1580. (Note: $1300 is the upper end of the usual range.)
     
  17. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    358
    Location:
    New York
    Yep we actually pay $US1964 per month to the coop. (so about $2600 pm $A)

    The rest covers vacuuming halls/garbage pickup, snow shoveling, gas,water,heat, insurances for the building etc etc

    What I was really pointing out was how much New York city is sucking up in taxes etc compared to Australian council rates etc eg now up to 64% of our buildings running costs
     
    Perthguy likes this.
  18. Angel

    Angel Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    1,836
    Location:
    Paradise, Brisbane
    Let's remember that Sydney doesn't require snow services :D
     
  19. Dean Collins

    Dean Collins Well-Known Member

    Joined:
    21st Feb, 2016
    Posts:
    358
    Location:
    New York
    Yep and trust me when you hear them out there shoveling snow at 6.30am in the morning and you are all cosy and warm in bed......you drift back to sleep thinking that's the best $310pm that you ever pay :)


    (note: $310pm is combined for the whole building includes the vacuuming/cleaning of the common area and trash removal 3 times a week as well as snow shoveling so excellent value).
     
    Angel likes this.
  20. C-mac

    C-mac Well-Known Member

    Joined:
    26th Jun, 2015
    Posts:
    895
    Location:
    Sydney
    Just picking up on a comment someone said on this thread not about NYC but about AU...

    Did someone say there was a $500K value 'cap' (or threshold) on CGT for PPOR holders?? Surely that isnt correct? I.e. those Mosman elite who are sitting in their (now) $3million valued PPORs but probably paid like $300K say 30 years ago. Are you telling me they would be liable for CGT on $2.5Mill of that $3Mill value, if they sold tomorrow for $3Mill??