Accountant suggested buying IP under a Discretionary Family Trust. Sounded great with distributing income and distributing CGT when we sell.
So we bought our first IP in NSW under the Trust (settled last week). BUT he grossly miscalculated the land tax we’d be paying every year [blink]- this year over $2,500! And it’s likely to go up to $5,000 when the Valuer General has another look.[chill] He was under the impression we’d be paying around $700 pa in land tax before the May mini-budget, and thought we were exempt after the budget with the $330,000 threshhold. Chartered accountant [angry2][baaa] Conveyancer told me otherwise… apparently it’s a business, no threshhold, and it’s always been that way.
Is there any way around this problem? or do we have to grin and bear it?
Any advice or suggestions would be appreciated. Ta
Scarlett
The vic state govt. are doing similar outrageous things down here.
Gee, it hurts when the accountant is wrong. Sack him!
Maybe consider putting the next property or so into your own name up to the threshold, and go from there.
i feel your pain. Try just to think of it as another cost as an investor. There will always be surprises like bad tenants, property price drops, hot water service repairs, and on and on. Just remember why you bought property in the first place and think of all the oodles of cash it will make you down the track.
Live, Learn and GrowLifexperience
LOL LifeX [biggrin][lmao] Tenants have been in one week and we’ve already had to fix the gas heater [dazed]
I’ll just think of all the oodles of cash while we eat cheap noodles [whistle][
]Thanks for your kind words [nice]
Hi Scarlett,
If you want my advice I would seek out independent professional advice from your accountant. That way, you’ll be sure of getting unbiased, professional correct advice.
Hang on….I’m not an accountant so I couldn’t possibly give that advice….scrub all that.
Just wait ’til the tenants call up and ask for you to change their tap washers at $70 a pop…have a chat to Landt64…hey a tip…I’d draw the line though at providing your tenants with free tissues so you can go around and wipe their noses when they want to have a little bleat.
I’ve found dry crackers are quite adequate for all residential Landlord’s to survive on. Noodles…geez, we used to dream of affording noodles…
My suggestion is to run the bean counter off and seek independent legal professional advice about dragging his sorry butt through the courts….but hang on….can we now trust the lawyer…does she know her stuff ???
Sorry – I’m having a flippant moment. It ain’t much fun when the people you supposedly rely on pay big bucks to get it wrong. Talk to people you trust and get a good’un on your team.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Hi Dazzling, thanks for your amusing input. [biggrin]
Yeah, I know what you mean about solicitors – you don’t go to Joe Blow down the road to do specialist work. The thing is, I just didn’t know that trusts were a specialised subject for accountants [blink]
I popped in on Mr Cantcount this morning for a nice chat and cuppa. Funny how he gagged on his wafer thin biscuit when I brought up 1.7% flat rate land tax on trusts [dozey]. Poor fellow. He mumbled something about crystal balls with a totally blank look [nerd]. Then I explained the tax implications to him in monosyllables:
1) Trusts have always paid a flat rate land tax in NSW.
2) In 2005 it was 1.4% pa
3) In 2006 it will be 1.7%.He spluttered his tea and left the room, came back after 5 minutes and proceeded to tell me why trusts are so effective, and “you never know, they might change the rules some day”.[dizzy][dozey][arrowhead]
@#$%^*[sealed]
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