Hello, I have some questions and would be great for some1 to answer as Im only “newby” and have heaps of questions [grad]
Land Tax.
In Victoria, how does land tax work. Is there a threshold in where land tax is exempt? If so, can this tax free threshold be multiplied by having more than 1 trust’s owning property. (any difference between owning the property yourself or with a trust.
Trusts
I see that Ed Chan Reccomends using a “property Investor Trust” as they are designed for the property inverstor, He quotes that they cost about $1500 to set up. (this may be a pre July 1st price?)What are the annual fee’s of having a trust (if any)
What are the annual fee’s of having a Company (if any)
Thanks for your help.Hi
It is very confusing. My understanding is that in Victoria, the trustee must pay an additional surcharge as well as land tax. But the trust may nominate a beneificary who can pay the land tax on behalf of the trust, and I assume get some relief with the tax free threshold. But a beneificary paying the land tax may not actually be able to claim a tax deduction. see http://www.moorestephens.com.au/main/newsandevents/documents/Land%20tax%20concession%20for%20discretionary%20trusts%20has%20income%20tax%20sting%20in%20its%20tail.pdf
As far as I am aware, the main benefits of a property investors trust may have gone out the window now that unit trusts are considered the same as discretionary trusts for land tax purposes. ie Land tax should be the same in this trust as any other trust. But it may still be worth having a unit trust with the units held by a discretionary or hybrid discretionary trust for other reasons.
There are no annual fees for a trust. A tax return must be done and there are accounting fees for this. But it shouldn’t be too much extra compared to owning the properties in your own name.
WIht companies there is an annual ASIC fee of about $400, and a tax return as well.
Terryw
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Hello
Terry, in Vict. only for land acquired by a DT on or before 31 Dec. 2005 were you able to nominate someone to pay the land tax and so not incur the surcharge. For land bought by a DT after that date a surcharge always applies.
For a unit trust the land tax is charged to the unit holders (if they are named, otherwise surcharge applies) in proportion to their unit holdings. This is naturally aggregated to their other land holdings.
I asked help about this problem some time ago and there were a few good posts there.
igrapleu if you are interested here is a link to it .
https://www.propertyinvesting.com/forum/topic/23233.html
Cheers [smiling]
Elka
Thats for your help and for providing the links with the information. I will check them out.
Cheers
Ben
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