With NSW recent tax changes to both vendor duty and reinstatement of the land tax threshold, Victoria now stands heads and shoulders above the rest (again) as the highest taxed state when it comes to investment property! For example, buy a $400 000 property and you're up for $19,660 in stamp duty and a few hundred a year in land tax (assuming here that the land value is $250 000 this would equate to $300 for example). The same priced property in NSW, purchased in a personal name, costs around $15000 in stamp duty, and with no land tax due (using $250 000 as unimproved land value) makes NSW attractive once more. Now all we need to do is improve our rental yields
On the subject of Land Tax, my accountant informed me this week that the reinstatement of the former tax threshold does not take effect untill Dec '06. I was under the impression that I wouldn't have to pay the dreaded tax next year, wishful thinking. I obviously got a bit excited when they announced it and didn't listen too closely to the detail. Was anyone else out there under the same impression as myself? cheers Up Beat
This is what the OSR site says about the 2006 changes: http://www.osr.nsw.gov.au/portal/page?_pageid=33,117630&_dad=portal&_schema=OSRPTLT and this..... In the 2005 tax year, the land tax threshold was abolished and a progressive tax rates scale introduced. In 2006 and for years prior to 2005 there is a land tax threshold. This means if the combined land value of your taxable land was under this threshold you are not liable to pay land tax. How will land tax be calculated in 2006? Your land tax liability (if any) for 2006 will be calculated based on the liable land you own at midnight on 31 December 2005. So it appears to me that the reinstatement for 2006 (though at a new and higher level of $330 000 compared to the previous 2004 threshold of $317 000) is based on the taxable land owned as of 31 Dec 2005. Might be a good idea to show your accountant this information, just to clarify. Hope this has helped
Reading the info from the OSR site has clarified this for me Thanks again for your help Jacque cheers Up- Beat
