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NSW Land Tax

Discussion in 'Accounting & Tax' started by dabbler, 30th Mar, 2016.

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  1. dabbler

    dabbler Well-Known Member

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    Hi All,

    While I have been aware that buying individually can be a good idea, I am wondering if my thinking on NSW land tax may be right.....

    So if you have joint properties and want to lower land tax, instead of trying to convince partner and re paying stamp duty and the related possible headaches, would it be a similar outcome to seperately as individuals buy with a company or trust ?

    Due to major dramas in the past which I won't post here, the aim is to make both accountable or required for changes, which really does not hurt.

    Thoughts ?
     
  2. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Companies get a separate threshold, but trusts get no threshold at all.

    Couples owning property separately rather than jointly can save up to around $7,712 in land tax per year in NSW.
     
  3. dabbler

    dabbler Well-Known Member

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    Then have to consider company and running costs, I assume you would have to be saving over a grand or so to make this worthwhile.

    I was thinking individual and company, but this probably gets very messy, probably many lender issues then too that I have read you and others write about.

    So joint or individual if you want to save, not too late to start doing individual.
     
  4. dabbler

    dabbler Well-Known Member

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    I must say, the NSW system can seem quite complex when partners/spouses do many and varied things.

    It is weird that buying joint multiple times with multiple separate people are each given a threshold.

    As said, we have only done things joint, but, if each spouse buys 1 property individually, does this not overcome the one threshold that you would be under if you kept everything joint ? Seems that doing this would accomplish both being treated as individuals with your other share of joint ownerships added on.

    Or do they work it in reverse, look at all the joint under one threshold, then add the individual ownership (the wording would indicate no).
     
  5. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Not sure what you mean, but joint purchasers get one threshold as if they are one person. But if they were to go out an buy separately they don't get another full threshold because their share of the jointly owned property will be taken into account.
     
  6. TFBoy

    TFBoy Well-Known Member

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    If a couple owns 3 properties in nsw:

    1. 495k owned by husband
    2. 495k owned by wife
    3. 495k jointly owned

    Would it be right to say they only have to pay land tax for property 3?
     
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    yes = actually no, because the threshold is currently $482,000 so all 3 would be subject to land tax. Assuming those are land values.
     
    Last edited: 30th Mar, 2016
  8. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Land tax isnt complex. Not considering land tax or not seeking professional advice is the problem. DIY tax advice isnt free.
    What you dont know could harm you.
     
  9. dabbler

    dabbler Well-Known Member

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    Yes, so if spouses own 3 (or 5) properties 50/50 and nothing else, they get one threshold as they are one purchaser.

    What I was thinking is if spouses own 3 (or 5) properties 50/50 and then they go and buy the next 2 as individuals, then this should, from the wording it seems, give them a threshold as individuals then you add the 50% share from each 3 or 5 joint properties.

    Does that make more sense ?
     
  10. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Depends on state. Technically yesbut not always. I have seen some not register and later get pinged for the joint and the individual props and also be unable to claim a deduction.
     
  11. dabbler

    dabbler Well-Known Member

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    I am only talking NSW, I have spent time talking with OSR and probably should get them to write some things instead of talking. I am also reading from the website.

    I am not trying to unscramble an egg, but if this in fact will work, it would be good as no way could it have been done another way.
     
  12. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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  13. dabbler

    dabbler Well-Known Member

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    Thanks for the links Terry, seems OSR gave me some wrong info regarding secondary taxpayer, so will speak to them again and see what I get.

    Also seems that other joint or individually owned property triggers the secondary taxpayer situation & prevention of double taxation.

    Also thanks Paul, it would seem to be wise to register for land tax in NSW even before you are at or near the threshold, real or imagined.

    Cheers
     
  14. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    Yes it is wise to register for land tax in every state when you acquire irrespective of value. Way too may forget or think they registered when they didnt.
     
  15. Scott No Mates

    Scott No Mates Well-Known Member

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    And remember to reregister every 5 years if you're below the threshold - SRO cancels unused registrations.
     
  16. Paul@PFI

    Paul@PFI Tax Accounting + SMSF Business Member

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    I hadnt seen that. I understood registration remains until changed.
     
  17. dabbler

    dabbler Well-Known Member

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    In QLD they told me they will contact you, I will admit I did not look further after was told that.
     
  18. dabbler

    dabbler Well-Known Member

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    Do they notify you at all that they are dropping you off the system ? Are they trying to save on expensive IT storage space :rolleyes:
     
  19. Scott No Mates

    Scott No Mates Well-Known Member

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    No alerts afaik.

    Caught up at settlement.
     
  20. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

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    Which means it may not be claimable if over 2 years worth.
    Tax Tip 8: Forgotten land Tax Tax Tip 8: Forgotten land Tax
    (may be used to reduce CGT though)