I bought an IP 5 years ago for $300k and did not receive a Land tax bill until last week.
The bill is $445 for the current year.
So it appears that I have saved over $2k of land tax payments in the last 5 years…
Yippeeee
Has anyone here had a similar experience???
You pay land tax once your total IP "unimproved land values" as indicated on the council rates notice exceed a certain threshold. In vic it is $250k. Maybe 5 years ago the total of all your IP land values was under the threshold? Now with growth, you've nudged over the line?
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Ah maybe thats it – The tax is on the "unimproved" value. If that is correct I can see the original value would have been lower than this but what if its on the total value?
Here is how it works:
Gather the rates notices of all your IPs (your PPOR – your primary place of residence, where you live – is exempt).
Look at all the respective unimproved land values for the current financial year.
Total them up.
See if you are over the threshold. If you are, some land tax will be owing.
Here is the overview:
http://www.sro.vic.gov.au/sro/SROnav.nsf/LinkView/DF4424845447E2EDCA2575A1004453B6A6FAB6BE64979127CA2575A100441FA4Here is how you can see how much you will owe:
http://www.sro.vic.gov.au/sro/SROnav.nsf/LinkView/DA6A217C7F452EF8CA2575D20021EBE7C580F3A333F4AD44CA2575D10080AD1CRemember that land tax is different and separate to stamp duty (which is paid at time of property acquisition). It is also different and separate to your council rates.
Apparently land tax catches a lot of people out because they simply didn't realise it exists. Why? Not everyone owns multiple properties. We're born, raised and told to save hard, buy and pay off our home and then everything will be alright because we have superannuation. Gulp.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
The onus is on the property owner to register for land tax, not doing so may leave you open to penalties.
According to the VIC land tax rules, my earlier comment as per below is inaccurate:
"Look at all the respective unimproved land values for the current financial year. "It actually goes by calendar year.
http://www.sro.vic.gov.au/sro/SROnav.nsf/LinkView/DF4424845447E2EDCA2575A1004453B6A6FAB6BE64979127CA2575A100441FA4Check other state revenue offices regarding land outside of VIC.
There are some interesting exemptions worth checking out, such as if the property is vacant due to flood damage
http://www.sro.vic.gov.au/sro/SROnav.nsf/LinkView/13202BA8A98E4A7ACA2575D6001DA9A3357FEFE8147EF37DCA2575D6001D1E1BJacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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