I'm getting close to buying my first IP (of many). After discussing options with a local accountant (which wasn't any help), except he said that I needed to be careful of land tax killing any profits I make. I'm now thinking the state(s) I purchase in while building my profolio will be very important.
Does any one have link to information for each state what the land taxes are & what the free limits ?
What are other peoples strategies for dealing with land tax ?
A google search on, for example, “NSW land tax calculator” will give you what you need. The office of state revenue typically has a calculator online to help – eg NSW has one at http://www.apps05.osr.nsw.gov.au/erevenue/calculators/landtax.php, but you have to read the fine print as the meaning of taxable value and exemptions vary from state to state.
If you are looking for CF+ property and are developing a land tax problem in a particular state you can also look at optimising “cash flow density” – ie rent received per unit of taxable value – land tax is generally applied on the value of unimproved (ie vacant) land so if you have a bunch of units on a small block, rent will be high but land tax will be low.
Thanks, I've found the links for the various states.
Trusts seem to be heavily hit my land tax & seems to reduce their appeals to me. Am I missing something ?
When it says that my PPOR is expempt, I assume that means it doesn't count towards my threshold at all in that state ?
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