Hi
My husband and i have a few "negatively geared" properties. We love the idea of "positive gearing"
the only thing stopping us from buying more property is the ridiculous LAND TAX fees and the way it
is scaled on the total value of property owned.To find a property to cover the loan repayments and the rates would be one great find ie return of 10-11% if
borrowing the total value of the property…..but how do you get round the land tax that will keep
increasing as you keep buying property.Any experienced advice would be welcome.
dome11010,
11010 isn't that the modem call?
Never mind, the land tax is state related. Thus you can buy in different states and it is person related, so you can put the properties in both names ( 50% land tax for each ) or in one name then other and spread the load so to speak.The other thing you can do is buy in trust, read all about them on the site or ask an accountant. Or maybe through a SMSF ?
Land Tax is a ripoff, as you say , you hit a wall once you get to the land tax free limit, after that the number all change.
As pointed out above, there is a threshold for land tax in each state and it is independent of every other state. That way, you can spread your risk over each state and have the benefit of the threshold in each state. The threshold in NSW is about $370k, this is usually above the price of the land content of a median priced house or unit. In NSW you get a bonus as well, instead of paying 1.6% of the land value for all property above the threshold, it steps up to 2% when you have $2M UCV.
Some states (not all) allow you to get the threshold when you purchase in a trust, so this may also be an option.
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