Viewing 7 posts - 1 through 7 (of 7 total)
  • Profile photo of aussieguy2000aussieguy2000
    Participant
    @aussieguy2000
    Join Date: 2010
    Post Count: 81

    I am just wanting to get a bit of a clarification on land tax and at what point it would be payable.

    I am starting to develop a small collection of IPs and have a few questions, as I understand it, land tax is a state government tax, and it therefore payable to each state government.

    1. Are the thresholds for each individual, or is a married couple treated differently or only entitled to one threshold together (standard joint tenant agreement)?

    2. Is the tax free threshold for land tax for all properties held throughout the country or just for each state?
    (ie. Can I own 200k worth of land in 5 states and never pay land tax or because I have 1mil worth of land I would have to pay to each state a portion depending on their thresholds etc).

    3. How can I know that our PPOR, which we am not currently living in due to being on the other side of the country for work and currently renting out, is still being treated as our PPOR and not being factored in for land tax in case some sneaky state government tax man sends me a bill without asking first?

    Thanks in advance.

    Profile photo of swampy30swampy30
    Member
    @swampy30
    Join Date: 2003
    Post Count: 85

    Hi aussieguy2000

    In answer to your questions;

    1) thresholds are per individual
    2) tax free thresholds vary per state – and the Northern Territory has NO land tax
    3) you can check with the relevant state revenue office; and you prove your PPoR status by proving utility bills in your name at the relevant address

    Check out http://www.land tax.com.au (found by Googling in 2 seconds) for thresholds and rates!

    Cheers

    swampy

    Profile photo of aussieguy2000aussieguy2000
    Participant
    @aussieguy2000
    Join Date: 2010
    Post Count: 81

    Thanks swampy,

    I found the land tax website through google, I do check there first before wasting time writing on a forum as if what I am looking for comes up easily it saves me time posting, however that doesn't really clarify my question 2 and 3.

    Q2. I was asking if I had 200k of property in 5 states, assuming that the threshold is more than 200k in each state, would I still have to pay land tax because 5 x 200k is a total of 1mil throughout the country, or does each state only take land owned in its state into consideration. (I know I am not eligible for any state First Homeowner Grants (such as stamp duty exemption) as I own my home in NSW, so there are instances where a different state is not a consideration).

    (I unfortunately don't actually own this much property… yet….
    however am using it as an example).

    I clearly stated that my PPOR is rented out, therefore I would not have any utility bills in my name, as I have been required to relocate to another part of the country due to work requirements (I am in the ADF), the property is still able to be considered my PPOR for 7 years after I have vacated it. (I have heard of the possibility of this being able to be extended, but I would rather us not go into that here as it will only complicate the thread and steer it in another discussion).

    Q3. With the above in mind, how do I ensure that it is always treated as my PPOR, and not as taxable land that the government would send me a bill on if I was to exceed the land tax threshold. (Perhaps this is something that my accountant should do at tax time, or is there something else I must do?)

    Perhaps help from someone who has dealt with these topics or has a reference to a webpage that are usually inconveniently hard to find that gives the detail on it would be of great assistance.

    Cheers

    Profile photo of swampy30swampy30
    Member
    @swampy30
    Join Date: 2003
    Post Count: 85

    Hi Aussieguy2000,

    Each state looks only at the land owned by you with it’s own borders e.g. Qld does not care that I pay land tax in
    NSW, only that I own land less than the threshold for Qld

    Re q3, do not confuse capital gains tax exemption with land tax exemption, they are 2 different taxes with their own separate rules
    If you are not living in a property, it is not your PPoR for land tax purposes (in NSW anyway). I had to pay land tax on my PPOR whilst overseas, but still am claiming CGT exemption under the 6 year rule.

    Cheers

    Swampy

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856

    To add to Swampy’s notes above, if you are not living in the property as at 31/12 then you may be liable for land tax, if your total holdings in the state exceed the threshold.

    Profile photo of aussieguy2000aussieguy2000
    Participant
    @aussieguy2000
    Join Date: 2010
    Post Count: 81

    I am still safely within the thresholds for now, and knowing that I can purchase in other states with a new threshold is an advantage.

    Am I correct in reading that the threshold for NSW and QLD are 387k and 600k ( http://www.osr.nsw.gov.au/taxes/land , http://www.osr.qld.gov.au/land-tax/about-land-tax/land-tax-rates.shtml ) or am I reading it wrong? This is a huge difference, especially as Sydney prices are generally more expensive than in QLD.

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,213
    swampy30 wrote:
    Hi Aussieguy2000,

    Each state looks only at the land owned by you with it’s own borders e.g. Qld does not care that I pay land tax in
    NSW, only that I own land less than the threshold for Qld

    Re q3, do not confuse capital gains tax exemption with land tax exemption, they are 2 different taxes with their own separate rules
    If you are not living in a property, it is not your PPoR for land tax purposes (in NSW anyway). I had to pay land tax on my PPOR whilst overseas, but still am claiming CGT exemption under the 6 year rule.

    Cheers

    Swampy

    Swampy,

    In NSW there are some exemptions for temporary absence from main residence. It is much more complex than the CGT exemptions though. I can post details if you can’t find it (am overseas now)

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
    http://www.Structuring.com.au
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au

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