Hi All,
I bought my Sydney IP almost 2 years ago. I didn’t receive any notice from the council regarding land tax. Is that because it’s land value is still under the threadhold of $261K ? How can I find out it’s land value? An accountant firm prepared for my a depreciation schedule showed its land value of $200K . I don’t know where they got this value from.
The IP is in joint tenants with 99% my husband’s & 1% mine. If we want to buy another IP in NSW how should we structure it to minimise paying land tax? The NSW gov website indicates that the threadhold is not applicable to Trust.
I’d appreciate your advice.
Regards
Huey
Hi Huey,
I’m REALLY no expert but…
“I bought my Sydney IP almost 2 years ago. I didn’t receive any notice from the council regarding land tax. Is that because it’s land value is still under the threadhold of $261K ?”
Yep[
]“How can I find out it’s land value?”
If you check out the gov. vluation that should include land value and improvements value separately. Call the agent who is managing your property or the council. []“An accountant firm prepared for my a depreciation schedule showed its land value of $200K . I don’t know where they got this value from.”
Neither do I []“The IP is in joint tenants with 99% my husband’s & 1% mine. If we want to buy another IP in NSW how should we structure it to minimise paying land tax?”
You could put it in a unit or discretionary trust (around $800 set up costs) with you as the trustee and you and your husband as beneficiaries. You’d still have to pay property tax once the land value in the trust reached the threshold. But, you could then establish another trust (and pay another $800-1000). Be careful though, make sure you include something that indicates your prmary motive being to secure/protect the asset or you might send tax avoidance signals[}]!!! But the rules are changing all the time so nothing is 100% secure. I’ve set up a corporate trustee to work with a discretionary trust. Have you read Steves Wealth Guardian? It nice and simple and includes most of what you need to know[8D]“The NSW gov website indicates that the threadhold is not applicable to Trust.”
That site is not that informative and probably doesn’t take the trust arrangement into account. Have you tried discussing this with the Office of State Revenue directly. They are pretty helpful at times[:0)]Regards
Hungry[]
PS: Check out the thread on “trust-advantages” you might be able to get more definite info from some of those guys.Hello,
I don’t know about in NSW, but in the ACT we have to notify the revenue office within 30 days of the property becoming liable for land tax (i.e. being rented out). Did you do that originally?
Luckyone
Hi Lucky, I didn’t do that because I didn’t know I had to! I may be in trouble. I couldn’t find any land value info in the Council rate notice.
Hi Hungry, I think in NSW there is no land tax threadhold for discretionary trust.
[?]
Huey
Hi, to my knowledge land tax is calculated on “unimproved value” of land. Up here in Qld this value is shown on your rate bill. Drag your rate bill out of the cupbord it may be on there.
Cheers
Caddy..where there is muck there is money.Hi All
We can send an email to [email protected] with Lot number & DP number of your property, they will let you know its current unimproved land value.
Regards[
]Huey
Hi Huey,
I’ve heard the idea of no land tax in units trusts being mentioned before, but this is the reply I got from the NSW OSR a couple of days ago:Re: Trusts
Unit Trusts are not exempt from land tax,they get the benefit of the
tax free threshold which is $261,000 for the 2003 tax year.If the total land value of property in the Unit Trust is less than
$261,000 they are not liable for land tax.If the land value is above $261,000 tax is $100 plus 1.7 cents for each
$1 in excess of $261,000If the Unit Holders are discretionary trusts and come within the
definition of “Special Trust” separate returns are required for each
trust to show their individual interest in the land.
Land owned by Special Trusts or Hybrid Trust classified as special
trust will be taxed at 1.7 cents (2003 tax year) for each $1 of taxable
land value.Special Trusts do not get the benefit of the threshold.I am also enclosing definition of a Special Trust.
Hope this information is of help. If you require more information you
could refer to our website http://www.osr.nsw.gov.au or call our enqiries line
on
9685 2155Regards
AnsaSo it seems there is no escape from the long sticky arm of the revenue office
.Regards,
Hungry[]PS: The news about the discretionary trust/hybrid trust not receiving the benefit of the threshold is just depressing, but thanks for alerting me to the horrible fact[
].Hungry[
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