Hi Guys,
I was wondering if anyone could tell me how much land / how many houses people were allowed to have before land tax kicks in for each state.Cheers
Land tax is not that big a deal in some states. In WA it is irrelevant but in NSW it is quite high (2% I believe for the portion of land component over $400k). You wuold have to do a quick calculation to see if the land tax payable really makes a difference to your investing strategy.
Google search Land Tax in (state) to find the answer, it should be the first hit you get.
Cheers,
LukeWell, in VIC, I'm seeing over $800 pa land tax on a total land value holdings worth $550K, which is a fair whack. Like stamp duty, land tax varies from state to state I suspect, as Luke also commented earlier.
This probably also ties in with another post of 'house vs units' eg. if you own a unit in a block of eight only 1/8th of the total land value applies to your dwelling.
At one of our properties the value of the land value attributed to each apartment is just $25K which helps minimise the land tax situation.
Tracey B wrote:This probably also ties in with another post of 'house vs units' eg. if you own a unit in a block of eight only 1/8th of the total land value applies to your dwelling.At one of our properties the value of the land value attributed to each apartment is just $25K which helps minimise the land tax situation.
But you want as big a land component as possible, as buildings (generally) depreciate and land appreciates.
Units can have a large land component though- If you own a townhouse in an inner ring subrub in a small low rise complex of say 6 units you would probably find that the land component is worth more than that of a similar value house on the city fringe.
Cheers,
LukeThis link is for the Victorian state revenue office,but contains links to all states and territories,should have the info you are after ccpat.
http://www.sro.vic.gov.au/sro/SROnav.nsf/alltitle/Useful%20Links?open
luke86 wrote:But you want as big a land component as possible, as buildings (generally) depreciate and land appreciates.Units can have a large land component though- If you own a townhouse in an inner ring subrub in a small low rise complex of say 6 units you would probably find that the land component is worth more than that of a similar value house on the city fringe.
Cheers,
LukeYes, and I might have read somewhere that when looking at an investment property, 60% (or above) of the value of the property should be land value, up to a point of course. No use having vacant land (ie. 100% value of the property is land value) that wouldn't rent for squat.
But at the end of the day it does depend. With a new property where the building (or improvements) is a greater proportion of the value of that property, there is also likely to be greater depreciation benefits.
ccpat wrote:Hi Guys,
I was wondering if anyone could tell me how much land / how many houses people were allowed to have before land tax kicks in for each state.Cheers
It is not a question of the number of properties – it is a question of the land value upon which the properties sit. THe value is aggregated over your total holdings.
The threshold and rate of payment, before land tax is triggered, for each state can vary widely. When I last looked, some years ago, Qld had a higher threshold before land tax was payable but the rate of payment quickly accelerated as the value of the land holdings increased.
When I last checked NT had no land tax regime – but given state governments are at different stages of the economic cycle things may well have changed so as someone else suggested do a google search on land tax in your preferred state.
To add to the confusion some states have different thresholds for individuals V trusts/companies.
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