Land tax minimisation strategies

I need some help on some tax mini strategies.
Currently paying 16k taxes on portfolio of 3.2 million property all in NSW.
I read that prepaying interest
or doing a lower land valuation through independent valuer may reduce that.

any ideas

 

Are you willing to change ownership?

Not much you can do really. prepaying interest won't reduce land tax.
challenging the values may.

 

Don't hold land only buy apartments/units.

There'll be minimal land content to attract land tax.

 

Move into the property with the highest valued land.
Sell and buy interstate
Sell to related companies

 

Don't own property - buy shares.

 

Spread your holdings across multiple states.

 

Is land tax calculated only in the state its owned?

 

Yes it’s a state tax.

 

Yep!

 

The problem with land tax is once you realise its expensive its often very costly to address it. CGT, Stamp Duty, legals etc. And refinance issues.

NSW has a smoothed threshold that uses a 3 year avg but is also a rare state that indexes the tax free threshold. So any value changes wont fully reflect. And the timing of a valuation is important. You have 60 days. You cant now look at the value and consider last year was too high. Yes it may have fallen but thats not what the system allows you to object to.

Review of the applicable CURRENT year value may assist BUT in NSW may only impact the tax by 1/3rd eg $20K value drop will only truly reduce the taxable value by $6666 x 1.6% = $106. Hardly worth the effort

 

Plenty of properties in Sydney increased by much more than $20k. In the following residential example it has been: 17-18 5%, 16-17 15%, 15-16 19%, 14-15 32%



This commercial property (B6) was hit even harder (down the road from the above property): 17-18 10%, 16-17 12%, 15-16 50%, 14-15 18%

 

Is your PPOR not taken into consideration when calculating land tax? Or does this vary from state to state?

 

PPOR is exempt in all states. But only if the PPOR is the PPOR (meets definition).

 

I see, so if you purchase a empty block of land, intending it to be a PPOR when a property is built, it currently "isn't a PPOR" - hence subject to Land Tax?

 

not in NSW - depending on a few things vacant land can qualify for the exemption. Schedule 1A LTMA