Hi all, Just a question about holding structures for property in Victoria. I have an IP under a trust and looking at getting another Vic property in future. I’m the sole director, shareholder, beneficiary of the trustee/corporate trustee structure. I understand that if I purchased a property under a new trust but used an identical structure I.e., me as the sole (everything) the land tax office will likely group the land together, meaning a large land tax bill. Wondering if this would still be the case if I purchased under a company or my personal name? Thanks
You are unlikely to be the sole beneficiary of a discretionary trust. See the legal tip on this that I posted last week
Trusts dont get grouped. Companies can be. Trusts do get a low threshold in Vic that gradually phases in. Land tax current rates | State Revenue Office Also issues around trust net income need to be considered. ie Not neg geared ? Quarantined losses etc This can occur with a company or a trust.
I'm not sure how OP set up a trust being the sole beneficiary of it but let's say a discretionary trust has 2 beneficiaries and has an IP, to save on land tax can another identical discretionary trust be set up to purchase another IP? Is this what you meant by trusts don't get grouped?
Would appreciate it if someone would be willing to check my number on these calculations. Scenario 1 - 4x $400k land component properties owned jointly You receive a 'joint' assessment of $7775 per year, due to the land vale of $1.6m Scenario 2 - 4x $400k properties, 2x owned by each individual Each individual receives an assessment of $1975 per year due to individual land holdings of $800k each, for a total of $3,950 per year. Is this correct?
QLD doesn't seem to have joint assessments at all. I think they just allocate you half the land value and assess you as an individual. Any ideas about WA?
When I say trusts arent grouped there are no conditions. Its fact. No further explanation. COMPANIES can be grouped. Once landowners would evade land tax by having multiple companies own multiple properties. The sole remnants of that old approach is QLD and their present trust taxing rules. QLD allows multiple trsts to EACH have a threshold. NSW has no threshold. Vic has a low and tiered threshold etc...Thus they have a different approach to the same issue and QLD sits apart as the state with an apparent value of multiple thresholds when multiple trusts are used.
