NSW land tax question...

Discussion in 'Accounting & Tax' started by new2invest, 23rd Jun, 2020.

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  1. new2invest

    new2invest Member

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    Hi everyone
    I have a land tax question that I hope someone can clarify for me This relates toNSW land tax...
    In addition to already owning a property (PPOR) In NSW, I am looking at purchasing another property (holiday home or investment-not sure yet-most likely holiday) in NSW. From reading the NSW revenue website I’m not sure if I will or won’t need to pay annual land tax if I do purchase this other property?
    The land value on my current property is $ 290000 & land value of the place I’m looking at is approx $340,000.
    This will be my first purchase outside my PPOR, and further advise will be very well received. Thanks everyone :)
     
    new2invest, 23rd Jun, 2020
    #1
  2. JasonC

    JasonC Well-Known Member

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    Read about the land tax threshold here:

    Land tax

    From what you say, you shouldn’t need to pay land tax on your up/holiday property until the land value goes above $734k in 2020.

    Regards,

    Jason
     
    JasonC, 23rd Jun, 2020
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  3. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    It's under the threshold
     
    Terry_w, 23rd Jun, 2020
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  4. skater

    skater Well-Known Member

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    Your PPOR is exempt, so you only need to worry about land values of any other property you own.
     
    skater, 23rd Jun, 2020
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  5. new2invest

    new2invest Member

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    Thanks for the reply Terry. Just making sure I’m clear....
    because the land value of this holiday/investment AND my POOR is under $735000, I won’t have to pay any land tax? I will only have to start paying land tax when the combined land values of all my properties exceeds $735000??
     
    new2invest, 23rd Jun, 2020
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  6. JasonC

    JasonC Well-Known Member

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    No - ignore your PPOR from the land tax calculation - it’s exempt. Only add up the land value of your “other” properties.

    Regards,

    Jason
     
    JasonC, 23rd Jun, 2020
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  7. new2invest

    new2invest Member

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    Gotcha!! Thanks so much for the clarification Jason, greatly appreciate it
     
    new2invest, 23rd Jun, 2020
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  8. new2invest

    new2invest Member

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    Thank you
     
    new2invest, 23rd Jun, 2020
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  9. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    My tip - register anyway. You can accrue a debt through failing to register and changes in values but NSW does (currently) index the threshold . Other matters may mean you ARE liable for land tax - Read up about land tax surcharge. It has no threshold.
     
    Paul@PAS, 23rd Jun, 2020
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  10. new2invest

    new2invest Member

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    Thanks for the tip Paul-I will certainly follow your advise. I don’t want to be caught out!
    I’ve had a read about this ‘surcharge’, my mind is boggling..haha!! I’m now thinking that perhaps this might apply to my situation? I’m hoping you could provide some clarity? I’m not sure how we are going to structure the loan for this purchase yet. We will look at all our options with our current situation. If we purchase it through the family trust (Discretionary) (me being the trustee) one of the beneficiaries is not an Australian citizen but a permanent resident do you know is this will mean that they will be classed as a foreign person & we’ll have to pay the ‘surcharge’?
     
    new2invest, 23rd Jun, 2020
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  11. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    You will need legal advice on structuring the trust to exclude 'foreign persons' as defined in the duties act that way the foreign surcharge won't apply. But get some general legal advice about you being trustee and about using a trustee to hold the property generally - probably not a good idea in NSW.
     
    Terry_w, 23rd Jun, 2020
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  12. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    NSW has a bill before parliament. It basically requires each trust to exclude foreign persons as any beneficiary but it can't be varied. Legal advice is very important
     
    Paul@PAS, 23rd Jun, 2020
    #12