Land tax

I haven't appealed - SR) may decided to up the other property by 60k rather than reduce the more expensive one.

 

Objection is made to a specific property value and your objection needs to identify reasons why. Just to suggest it gone up a lot wont hold any basis. eg is there a issue with that land that affects its m2 value based upon surrounding norms ?(eg its got a huge rock pillar in the centre of the yardand its been a local landmark for shipping since day dot ?)

Its either allowed (to a value they determine using a process likely involving send a valuer past the lot) or refused. They arent allowed to then adjust another property value as retribution. They are bound by the valuations unless the owner objects.

 

Guys, Can I double check something.

If you buy a PPOR in QLD, you are exempt from land tax, what happen if you convert it to a IP? Are you still exempt? Or do you have to occupy it for at least 6mths to be exempt?

Thanks.

 

I don't think this will work. Best to check with the Qld Office of State Revenue of the implications when you convert your PPOR to an IP.

Perhaps not a problem if you're under the threshold.

 

The exemption only applies to the main residence, but there is a threshold you know- $600k per person.

 

Thanks Jane and Terry,

Problem is both me and my partner are both a few thousand off to the 600k threshold. :X

We don't have a PPOR yet though. Thinking of buying one but the Investor hat is always on.

 

Thanks Jane,

Took your advice and called them. Thanks for that! It's a complicated process based on their explanation. Seems that you have to apply using their form to be exempt from land tax on your PPOR. Even so, there are conditions to be met like min occupation period etc to qualify.

Trying to plan my way to avoid any future **** ups.

 

Check out
Public Ruling LTA000.1.2 The land tax exemption for a home
Public Ruling LTA000.1.2 The land tax exemption for a home - Queensland Treasury

 

Thanks Terry! This is very very useful and answers all questions I have. Appreciate it!

 

Labor government has stuffed up my retirement plans with Land tax upped to corporate rate (reduced tax liability threshold) as well as double whammy absentee tax. Self funded and forced into medical retirement with inability to work ever again with one lump sum to live off for rest of my life.

Invested in QLD property before budget turned it into a living hell. Staying in Thailand because cost of living in Australia made it too hard for me financially to see my money last till I die. Stupid idea buying an investment property in QLD if you intend to live off rental income and stay outside of Australia for more than 6 months in a financial year.

Labor government absentee curfew of 6 months or you get absolutely hammered with massive massive taxes. Surreptitiously introduced alongside the originally intended targets - non-Australian foreign investors leaving properties empty.

I get smashed with tax now and basically it will force me to sell at a capital loss because of the renovations I had to spend due to a dodgy agent feeding me lies. The income stream is not enough to live off now and I already pay income tax, all the usual property fees, trades persons as maintenance issues all the time, vacancy periods to consider, letting and management fees, rates, insurance, certifications. It goes on and on. I house a growing family who are employed in QLD, school their kids. I am providing a roof over their heads to stay in QLD and improve employment and growth and their own spending too. I am a battler am not wealthy and receive equivalent of a pension off my investments. I am screwed. No wonder so many people kill themselves. Thanks Labor.

 

Each state has attempted to deal with "foreign owners" differently. Many foreign investors attempt to evade (?) tax by seeking citizenship when their application for citizenship is largely based on a desire to live overseas and return to see their adult kids. QLD have changed the laws and if they wanted can make it worse like other states which have jacked up their surcharge rates since implementation. In NSW a foreign owner can be subject to land tax surcharge on their own home as well.

The unimproved land value that exceeds $349,999 is taxed at 1.5%. You need to assess whether the property is something to keep. Investment should always be reviewed when circumstances change.

If you sold and obtained the equity from the property you may find the income you can life off is vastly extended when you consider it like an annuity. For example $300K invested at 3% but drawn down over 20 years would increase spending capacity monthly by $1660.

 

1.5% tax is the surcharge for absentees.
There is also the base tax which would be 1.7% for the amount above $350k.
Schedule 3 LTA

 

Of course...The surcharge itself and its surcharge due to the reduced threshold on base land tax as well as the higher base rate v's non-absentee individuals. Many overlook the triple impact.

The impact is particularly noticed for absentees with unimproved land valued between $350K and $600k who may pay $0 as a resident but up to $8k as absentee. Assuming land as 40% of property value and a yield of 4% the impact of the land tax issue could represent a revised yield of 3.5% or 12.5% of total income

The absentee issue is also a caution for use of trusts and companies as strategy for those that think its a option. Its definitely a issue for legal advice for those who may be impacted now or in the future.

 

Thanks for the info, yes am in a bind here. I am 49 medically retired so annuity at this stage will still attract income tax and I could not live off the income stream provided. No Super left. Things are not looking good at all.