I am new to this forum (should know it earlier
), I am so frustrated by the land tax issue –btw, I am in QLD.I have a property under my name, and 2 investment properties under a Family Trust, I am a trustee. The FT had been paying Land Tax for two years as the total land value is over $350,000. OSR link: http://www.osr.qld.gov.au/land-tax/index.shtml I have spoken to my accountant, he suggested me to transfer the property A with higher land value (over$350,000) to my individual to reduce the land tax to minimus, and transfer my own house (rent it out now as I live with my partner, land value under $200,000) to my other FT. Thus would inoccur two Transfer Duties and CGT.
My friend advise me to move into property A, thus the property A (still under my FT) will be PPOR, no duty and CGT would be involved. BUT currently I have no plan to move out from my partner's house.
Any advices would be most appreciated.
Sell property in QLD and buy in another or several states of Australia. Diversify as land tax is done on each State revenue office.
As it is an investment you do not live in it so it can be in any state of Australia.You should weigh up how much you land tax is costing you compared to how much your exit costs/cgt/legals etc will cost you before moving too quickly. However, diversifying into other states is a good strategy – just watch that some states do not have a land tax threshold.
seasongreen wrote:My friend advise me to move into property A, thus the property A (still under my FT) will be PPOR, no duty and CGT would be involved. BUT currently I have no plan to move out from my partner's house.
Best advice is to not take advice from friends without confirming it.
If a property is owned by a trust you will not get the CGT exemption or the land tax exemption.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Other than the above post, i think it is generally too costly to transfer properties like that – CGT/legals/loan fees and stamp duty will be involved. But as Scott suggest just work out the costs and see how long it will take to recoup them.
Also consider the land tax rules can change and what is good today may not be good next year.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
If you have a property in your own name already, you will probably find that moving the other properties into your name would make negligible difference to the land tax payable, as the more land in your personal name , the higher the percentage of land tax anyway.
Remember also that land tax is a deductible expense.
If I were you, I'd leave it as is.
If you are highly geared however, it may be worth selling a property if the land tax is eating into your equity that much.
If my memory is correct, queensland has some of the cheapest rates of Australia anyway.
….Oh, and I love how accountants will recommend that you change your entire structure and incur thousands of dollars of stamp duties and transfer costs simply because "They would have set it up differently"
All structures have different benefits and drawbacks, changing things halfway through is a "Last Resort" in my opinion.
Tell your accountant to "jam it" from me.
…oh and your friends advice is …..um. … incorrect.
Thanks alot everyone.
I will not do anything till the state budget comes out next month. Hopefully there is something for landtax.
), I am so frustrated by the land tax issue –btw, I am in QLD.
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