Land tax , is it combined between all states ?

For sure I will have to sell some properties and if I want to re-deploy those funds into RE its going to be in Perth or Adelaide so spread my liabilities. My land tax is still not that bad - I personally know guys paying $100k+ each year on their land tax however their portfolios are triple or quadruple mine but then again their money asset value are rising at like $1M+ per month.

If your a big investor land tax is unavoidable. I did make a mistake of not spreading my properties but back then I did not have any confidence in Perth or Adelaide yet so I still dont regret going all in on Brisbane and Sydney which is paying off bigtime now.

Let see. Even if my entire portfolio rises at $100k a month, paying $40k odd land tax on an annual basis is justifiable to me still. I pay a **** tonne of tax from work and my company so I need some offset to claim anyway.

For the last 6 months I think the my portfolio value is growing more than $400k+ per month easily. Most likely more than $500k per month.

 

Land tax comparisons across Oz - (from PWC as at July 2021) - Linky

If only they would compare each state on the same basis (or at least put in the thresholds) it would be a bit more meaningful.

 

Yeah but I have no plan to sell, ever. So for me rising values not a good thing just more rates and land tax.

My mums house was in the same street as the house Matt Damon bought, we sold it two years ago. Damons place is the highest in Wategos, I used to hang out there a lot when I was a kid my surfing buddy lived there. Wategos used to be full of families and kids in the 70s, now there are none. Almost all the original owners have gone or passed away, three last year including my mum.

I've always been used to 2-3K bills in NSW with just 1 or 2 properties, so a jump from 2K to 8K and probably over 10K next year is a pretty steep rise, will be 25% of the rent.

 

But land tax comparisons also need to consider property "value"which they dont . eg Sydney prices v SA. Property value not land value and so on. How do you compare one v another ? Sure you may save land tax at expense of growth or rents.
One of the most common land tax avoidance mechanisms is to hold property in several states undeer threshold in each. However it may mean limited borrowing capacity is tied up in that state rather than a good place to invest. NT doesnt have land tax. But going hard on NT property isnt a strategy I have seen.

 

Or not at all

 

Thanks for that information iv heard QLD is trying to introduce this tax but are not clear yet how to go about it. my question is will they include your PPOR in another state on top of your IP in QLD.

Cheers Stan

 

Nobody knows how it would operate.

 

until legislation is drafted wait and see

 

Firstly, I wonder how they will access the data. This is a major reason it has never occurred. A example of the challenge they face exists. Its payroll tax. Once each state taxed away and there was overtaxing due to interstate workers etc. The process to give rise to uniformity to thresholds was the requirement to LODGE a return to access the data. In the case of land tax I'm sure no state wants taxpayers to lodge returns. But it is the simplest way to access the data. Privacy laws limit States sharing data with OSR in another state.

The second issue is the disparity between taxing dates and valuation dates and the date when thresholds are reindexed (eg NSW). If values rise in NSW the smoothed value is used for the threshold not the valuation AT a specific date.

The third issue is how the application of a threshold works. Land tax is assessed AT midnight on the taxing date. So lets use the example of NSW. 31/12/2021 was a taxing date. Not the day before or 30 June 2021. But QLD uses a taxing date AT 30 June 2021. So was any threshold applied ??

The fourth may be constitutional. Expect a challenge.

I see the Victorian greed tax on all developers is destined for the scrap heap. A good example that many proposed tax laws never make it past the thought bubble.

 

time will tell