Tax Tip 124: NSW Land Tax: Comparison of Joint v Single Ownership

How about Dad and Dave #1 Pty Ltd and Dad and Dave #2 Pty Ltd - do they each receive their own thresholds (and does the underlying shareholding / beneficial ownership and directorship impact things)?

 

There are grouping provisions to allow the commissioner to treat separate companies as a single person in some instances.

 

Hi, this might be a bit of a stupid question... but how does joint ownership get assessed? Does it become 50% of the land value gets applied to each persons land tax assessment? I'm guessing it is much more complicated than that though as I have spent the last hour trying to work it out both on here and the revenue NSW website... thanks!

 

The joint owners are basically assessed as one person, then if they have other non-joint property their share of the joint property is added to this.
LAND TAX MANAGEMENT ACT 1956 - SECT 27 Joint owners

 

Thanks Terry for the link, that explains it a bit more but I am still a little confused as to how it gets assessed, particularly if the couple each owns properties individually. Do you know if there are any examples online of this? I couldn't seem to find any on the revenue website, and the few that I found discussed on here were confusing with conflicting info.

 

Actually google just found me this which helped a lot!

NSW Land tax examples thread

 

Hi Terry,

Highly appreciate your effort contributing to the forum. Can I please confirm the below information if it is correct. (i did try to go around your posts to avoid double question but cannot find an answer yet.)

In NSW, is it true that the penalty of joint owner can be overcome as long as the property does not exceed the land tax threshold?

For example, A and B own 50% each in four x 500k land value properties. As all 4 properties do not exceed the land tax threshold, this will have the same land tax implications comparing to A owns 100% 2 properties and B owns 100% 2 properties? Or do I miss something?

 

Nope

A and B would be assessed as one taxpayer with a $2mil in land value which is over the threshold.

 

Awesome, I have tried looking for this information for ages. Many thanks again Terry

 

Just to clarify, by joint ownership do you mean only for joint tenants or will this be the exact same land tax outcome for tenants in common?

 

For land tax purposes Joint tenants are treated tenants in common in equal shares.