# Land tax liable joint owners

Discussion in 'Accounting & Tax' started by Mike10459333, 13th Apr, 2020.

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1. ### Mike10459333New Member

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Hi all

Hope you can assist and clarify below for me.

Just like someone to confirm for me a question about land tax liable in nsw.

Example
If homer and Marge own two investment properties jointly totalling \$1,500,000 land value. Is tax payable below calculation one or two below.

Calculation one)
(\$1,500,000 minus \$692,000) multiply by 1.6% = \$12,928

Calculation two)
(1,500,000 multiple by 50% ownership) = \$750,000

(\$750,000 minus \$692,000) multiply by 1.6% = \$928 liable for Marge and Homer.

Note threshold is based on average and and for 2019. Location is Sydney.

The reason I'm asking this question is on the revenue nsw website it has the following note. Since the properties are joint owned I'm not sure why I have not received two separate individual tax assessment as mentioned on their website.

Assessment

"You are assessed based on the total land value of all your interests in land, whether you own them as an individual or as a joint owner.

For example, if you have a 50% interest in jointly owned land, your individual tax assessment will include 50% of that land plus 100% of any land you own individually.

You will receive separate assessment notices for any jointly owned land."

2. ### Terry_wLawyer, Tax Adviser and Mortgage broker in SydneyBusiness Plus Member

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Whats the question?

3. ### Mike10459333New Member

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Would the land tax payable be calculation one \$12928 or calculation two \$928. As both investment properties are jointly owned.

Thanks

4. ### Terry_wLawyer, Tax Adviser and Mortgage broker in SydneyBusiness Plus Member

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They own \$1.5mil worth of property? So the answer would be 1.

5. ### HettyWell-Known Member

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I know we are talking NSW but in Queensland it’s #2 isn’t it? I can’t find anything like that for NSW. Taxable value of land

6. ### Terry_wLawyer, Tax Adviser and Mortgage broker in SydneyBusiness Plus Member

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Totally different laws in QLD. each joint owner is assessed on their share of the land whereas in NSW (in VIC) joint owners are assessed as one unit.

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7. ### Mike10459333New Member

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Would one method in minimising the land tax be to have one

8. ### Mike10459333New Member

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So to minimise land tax would an option be to have owner one and owner two to have separate properties on it's own instead if buying properties jointly in nsw? Thanks

9. ### Scott No MatesWell-Known Member

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The correct answer is: \$13,028 (calculated as LV - threshold + \$100)

Each corporeal owner (person) with an individually owned ip gets a separate threshold. Most types of trusts in NSW don't get a threshold.

Last edited: 13th Apr, 2020
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10. ### Terry_wLawyer, Tax Adviser and Mortgage broker in SydneyBusiness Plus Member

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Yes, I have a tax tip on this in the tax section here.

11. ### [email protected]Tax Accounting + SMSFBusiness Plus Member

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In the OP question he is confused by the issue of secondary assessments.

In the example Homer and Marge own two NSW properties. Hence one assessment. But if Homer owned another he would receive a secondary assessment with his 50% share of 2 PLUS 100% of another with one threshold given. He would also receive a credit for 50% of the joint land tax.

eg \$750K for the joint share + \$750K for his own property = \$1.5m less \$692K thershold = \$808,000 x 1.6% + 100 = \$13,028 less credit (\$13028 joint assessment x 50%) = \$6514 = \$6514 Due. Total land tax payable on three properties is \$13028 + \$6514.

So Homer wouldnt benefit from breaking land into joint and also personal ownership. But if Marge owned one and Homer owned one they could each duplicate a threshold. Until the threshold is met then its of no further benefit

You pay tax based on the combined value of all taxable land you own, not on each individual property. If the combined value of your land does not exceed the threshold, no land tax is payable.

12. ### Terry_wLawyer, Tax Adviser and Mortgage broker in SydneyBusiness Plus Member

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