Land Tax

I registered for land tax today and turns out im over the threshold. Who else pays it and if you don't mind me asking how much.?

 

I think every one minds it a lot!

 

Which state and did you make sure your ppor is exempted (if any)?
Everyone who is over the threshold pays it and it's different forfor each

 

I try an avoid paying it by using different entities but I have one landtax bill which is $9k - does that make you feel better?

 

It was simply just a question. Nothing to do with trying to make myself feel better. End of day its just another bill yoy have to pay when yoyr in this game. Anyway ill be speaking to my accountant before i make my next purchase to see what ways their are if any to minimise it.

 

For more years than I care to remember mine were very concentrated land rich (cr@ppy old house) IP's in Melbourne and they were a couple of multiples of five figures..............pooh bumm, dickee, dickee, wee wee.

I've divested now and have a few in my name, some in trusts, some in SMSF and in different states......... a little bit here and a little bit there, helps lessen the impost.

 

I'll gladly give you my bill

 

A close family member pays around 20k a year in land tax for two properties around Badgerys creek. It's going to get interesting when the lot eventually get rezoned....

 

And sold to a developer ?

 

Easy answer is anyone over the threshold in their state will be liable for the tax even if they arent registered. The tax amount depends on many many factors and in some instances can be reduced but may be unavoidable ???...

Prior to purchasing any further property it would be wise to consider the impact of land tax so you dont make the issue worse.

 

That's the plan, however it's still very early days.

 

I am doing some transfers at the moment for clients. Their land tax bill has now exceed $40 k per year and could have been avoided with structuring advice on the way in. Now they are spending over 3 times that to resolve.

That $3-$5k for a couple of entites and advice that seemed too dear on the way in suddenly seems like an absolute steal compared to the transfer duty and other costs to fix now

 

Structuring regret - is a new phenomenon.

 

I see regret years and years later. Nothing new.

Typical one is this discussion...

Client....I have a few IPs and they are paid off. Can I transfer one or more of them to my super so I can reduce tax on the income from marginal rates to zero.
Me. No. s66(1) of the Superannuation legislation prohibits a related party acquisition. There is an exception if its a commercial property but not if its a residential.
Client. So how do I get around it ?
Me. You can't. There is one way but only for a trust. And SIS has an anti-avoidance rule that draws in anything you do to avoid s66 as a breach.
Client. So you are telling me that I can have a superfund with $1m in cash and own a investment property worth $500K and it cant buy it even if its sold at market value ?

My latest concern is the large number of people who think a trust in QLD is a land tax saver. Long term it could cost them far more. There are problems with a disc trust owning property too:

• Grouping risks. Qld can easily change that law that gives each trust a threshold
• Risks of duty triggers in QLD if the trust is modified.
• Lender access to equity redraw can be affected
• Changes to borrowing - Lenders and rules changes
• No access to refinance principles as say a unit trust or spouse to spouse transfers
• Centrelink issues for relatives
• Can never be transferred to super
• Time based issues with neg gearing becoming +ve gearing....Loss of beneficiaries etc to distribute to can shrink any tax benefits
• Family law concerns can get complex
• Succession gets ignored - even lost !!
• Control protections are often not considered in off the shelf trust solutions