NSW Land tax examples thread

Hi All, we had another thread going on Land tax for NSW, it can be quite tricky working out how things will be taxed once you have joint and separate holdings, feel free to post your examples, I will put one below using round figures, feel free to pick it apart or do your own examples, as it may help others plan for NSW purchasing, I won't go into every detail as I am not familiar with every detail or scenario and you should get your own advice and do your own checks not take any post as gospel.

In NSW, a person, or persons, or entity or any combination on one title is thought of as a "purchaser" and each purchaser gets a threshold. But the calculation for the individuals adds from joint holdings with an allowance for double taxation (read OSR site on double taxation calcs), the below is just an example for people. But you never get 3 full thresholds combined, confusing ? well hopefully this may help clear some confusion.



So 2 people own 3 properties, for the sake of making it easier to follow, I have changed and rounded the land value amounts.

property 1 owned jointly by Fred and Jane 500k land value
property 2 owned by Fred 500k land value
property 3 owned by Jane 500k land value


So there should be, for this year, 3 480k thresholds. Calculated as follows.

Fred & Jane receive the threshold of $482,000 for the property/s they own together $500,000 - $482,000 = $18,000 x 1.6% + $100 (threshold) = $388.00 land tax payable for 2016.

Fred receives the threshold of $482,000. He owns in his own right LV $500,000 plus his interest in the joint file of $250,000 taxable land value = $750,000. $750,000 - $482,000 = $268,000 x 1.6% = $4288.00 + $100 = $4388.00 land tax payable.
We then have the secondary deduction of $1462.66. $4388.00 - $1462.66 = $2925.34 land tax payable.

Jane receives the threshold of $482,000. She owns in her own right LV $500,000 plus her interest in the joint file of $250,000 taxable land value = $750,000. $750,000 - $482,000 = $268,000 x 1.6% = $4288.00 + $100 = $4388.00 land tax payable.
We then have the secondary deduction of $1462.66. $4388.00 - $1462.66 = $2925.34 land tax payable.

 

Dabs - that doesn't look correct to me.

 

For the deduction to prevent double taxation you use the lower figure of 2 calculations.
See
http://www.osr.nsw.gov.au/sites/default/files/file_manager/ofs_lt06_1.pdf

 

I get $4,194 in land tax each.

 

lol...I hope it is right, but I will edit if we can find out for sure.

Is it the double taxation calculation alone that you feel may be off ?

 

I just re did the calc manually myself, I too get $4194

one calc = $1429
next calc = $194

So $4288 - $194 + $100 = $4194

So well spotted and that is why your on the big bux ;-)

 

For the others out there here are my calcs:


property 1 owned jointly by Fred and Jane 500k land value
property 2 owned by Fred 500k land value
property 3 owned by Jane 500k land value



Total Tax payable property 1

($18,000 x 1.6%) + $100 = $388

Fred’s interest in property 1 $250,000



Fred’s individual assessment (his share of Property 1 and property 2)

Fred’s 50% of property 1 $250,000

Fred’s 100% of property 2 $500,000

Total land value of Fred’s properties $750,000

Land Tax Payable on total land value of $750,000 $4,388

[($750,000 - $482,000) x 1.6%]+ $100 = $4,388



Minus the deduction to prevent double taxation – whichever is the lesser of calculation i) or ii)

i) Calc 1



$250,000/$500,000 x $388 = $194



ii) Calc 2

$250,000/750,000 x 4388 = $1,462



Fred’s allowable deduction is $194 so this total land tax bill will be

$4,388 - $194 = $4,194



Jane’s will be the same

 

Terry, you said Fred's total land tax bill will be $4194 and Jane's will be the same. I got the same result too. But did you forgotten the $388 land tax bill on property 1? That's still payable right?

 

Yes. It is a seperate assessment to that of each individual (if they personally exceed a threshold).

Its all not specifically relevant as the thresholds and property values back in 2016 have markedly changed.

 

Thanks Paul! Thresholds and land value have increase a lot, but the underlying calculation method stays the same, so anyone trying to work out their land tax position can still check out this post to learn.