Tax Tip 30: How to Minimise land tax in NSW

also dont just pay the land tax invoice without checking if you are exempt first
In my case they sent me a bill for our first year we rented out the house which was less than 6 months in that calender year, so I filled out the objection form that is on their website and they said they were wrong and to ignore the invoice

 

And if you do incur land tax make sure you claim it in the year it is incurred, otherwise it will not be deductible unless tax returns are amended and this may only be possible for 2 years.

See
Tax Tip 8: Forgotten land Tax https://propertychat.com.au/community/threads/tax-tip-8-forgotten-land-tax.2316/

Yesterday I had a loan client who controls a trust with a corporate trustee of a discretionary trust owning land in NSW - 3 houses - and no land tax expenses appeared on the tax return. They had no idea they were liable and surprising the accountant hadn't picked it up. The trustee has owned the properties for about 10 years now.

 

If i have 70% and my wife have 30% in all property which we register with OSR NSW and jointly brought properties land value worth of $600k, in NSW only is the value of Land tax spread accordingly for $432k of threshold so my wife's share is 30% and mine is 70%.
So it's under the threshold do I need to pay land tax and avoid registering?

 

No it is over the threshold. Yes you need to pay.

 

I have recently brought off plan which is settling in June 2016 , but paid duty to OSR we had contract in both name , is their any way we can transfer to one persons name instead of both names so the land tax can be saved since the combined threshold have already reached so happy to put in single name, need advise on this
Thanks

 

Why have you paid duty already? Must be outside of NSW?

It is possible, but you need to seek legal advice.

 

It's off the plan purchase in May 15 in Sydney but will registered in May 16

 

Duty is not due until May 16 in this case

 

I was told by my solictior that we need to lodge and pay stamp duty within 3 months of signing the contract
Can u advise any one in our form can help me in legal advise for this solution

 

See the legislation s49A Duties Act
http://www5.austlii.edu.au/au/legis/nsw/consol_act/da199793/s49a.html

 

It has 2 seperate titles for land & build,so my solicitor has advised that duty need to be paid within 3 months of land contract with OSR

 

Sounds like you've bought a house and land package not an otp unit @robi. Your land is under a separate contract with the builder so as to reduce the stamp duty paid on the transaction.

Has the saving in stamp duty offset the additional stamp duty & interest payable had it all have been one contract?

 

Yes, we saved some duty and paid other renaming amount , but I can I transfer to my spouse or trust now so I can skip yearly land tax as of now thanks

 

If you have settled on the land and it is owned jointly then any tranfer to a spouse would be at full duty. Transfer to a trustee would be at full duty too as would a declaration of trust

 

But I would save 5.5k every year right if I transfer on one name instead of paying every year and would like to hold the property for next 5-7 years

 

Make sure you seek advice before doing a transfer. You wouldn't want to pay all that stamp duty to find out you were wrong.

 

Yes terry you are right , you right
What's your consultation price for setting up structure
Thanks

 

I charge $550, but am unable to take any more clients for another month or so.

 

Does the above only apply if the trustee IS the spouse?

Is land tax payable if there's a DTT and:
1. life interest is given to the spouse.
2. trustee is child from a previous relationship

 

It should be exempt from land tax in NSW if the person with the life interest is living in the property as their main residence. If they die or move out then it would be subject to land tax.