Land Tax in WA

Wow...who is you accountant...looks like htey have stuffed up?

But a silver lining..I did an analysis of the costs of keeping multiple trusts vs paying the land tax.....you might be surprised it is costly in terms of accounting and compliance fees. The land threshold for individuals are as per below

By the way you mentioned you were developing 2 sites in inner and coastal Perth...how are you going with those...have you developed and sold those??

 

Generally we have found that up to $1m of value is ok to group together - ie could have 2 $500k properties in one Trust before setting up another.

The inner sites (if I'm thinking of the right ones) will be starting construction December-March next year. The coastal one (Clarkson) was completed and put on market at a very wishful price and didn't sell so I have converted to NRAS rental. I only wanted to sell it if it made my wishful price, otherwise I would hold and wait for the market to pick up. My other coastal project which if the JV with Blacky in Mindarie is still under construction but on the market OTP and enquiries have been encouraging at the price we are marketing at - most of the people want to see it more complete before they put in an offer though.

 

Thanks for the response...yeah if the threshold for trusts are the same as individuals...you might be okay or at less just pay couple of hundred dollars. What is it costing to maintain the trusts...the accounting fees are quite a bit...aren't they.

I didn't know you were developing in Clarkson and Mindarie! Very close to Butler...get what you mean...the whole Northern suburbs are down a bit.

The ones I thought you were I believe in Leederville?.....Gwelup?? The looked like good deals..did they get off the ground??

 

Gwelup was 4 and finished about 18mths ago now when the market was still strong. I sold one at around 45% gross profit and the other 3 are rentals and doing well.
Highgate and North Perth are my inner ones. They are still to go to site but still looking pretty strong at around 25% gross.

 

Wow ...I thought you sold all of Gwelup. Great margins.

Wow...the holding costs of Highgate and North Perth must be a killer...I am presuming they have houses on them ..to ease the shortfalls...good areas so renting would be easy.

 

That table is not the full story you also pay MRIT (metropoloitan region improvement tax) in WA which adds significantly to the bill. Westminster I think you will be OK if each property has a different beneficial owner they should be assessed on that basis rather than the legal owner (trustee) which is on the title. Remember the revenue offices assess based on land data from the titles office so would not be aware that the legal owner is not the beneficial owner (only the legal owner is on title). If I were you I would have contacted them first before having the accountant lodge an objection it may have been easily solved by producing the trust deeds. I hope he isn't charging for the preparation of the objection.

 

We did ring them (OSR) first and spoke with them and they advised to lodge objection with trust deeds and sales documents for the review.