Help needed from Queensland Investors.
Does anyone know whether an exemption applies to allow for the individual land tax threshold in QLD for SMSFs and Unit Trusts as it does in NSW and Victoria? That is, where it nominates down to an individual person to give access to the $600K threshold for individuals rather than being hit with the $350K threshold for trusts. I know it doesn’t for Discretionary Family Trusts, which makes sense.
I am looking at buying a few houses in inner Brisbane with higher land values and I am trying to spread my land tax liabilities.
I already have existing structures that hold 10 properties in Melbourne that include a Discretionary Family Trust, Unit Trusts and a SMSF. My land tax is already too high and I need to look elsewhere for future purchases. My preference is to use the existing trust structures for my QLD purchases rather than individuals but the trust land tax rates seem to be especially punitive.
Any help would be appreciated.re the SMSF, I will assume your smsf has a corporate trustee.
Land tax rates for companies and trustees are published on the tab with same name here:
https://www.osr.qld.gov.au/land-tax/about-land-tax/land-tax-rates.shtmlThe land is not exempt unless the land qualifies under exemptions (eg if it is being used as an aged care facility).
https://www.osr.qld.gov.au/land-tax/exemp-reb-land-tax/index.shtmlJacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Thanks JacM,
That’s what I thought it looked like when I read OSR site as it was silent on any other exemptions, but was hoping otherwise.
In Victoria, a SMSF (and yes I have a Corporate Trustee) and a Unit or Fixed Trust (if the unit owners are individuals) don’t pay the trust surcharge (i.e. lower threshold or higher rate) as the beneficial owners are non discretionary/identifiable, unlike a family trust. I understand it’s the same in NSW and was hoping for that in QLD too.
This is the first time I have considered buying interstate, I have found that the Land Tax rates vary so much by state that you really need to be careful with the structures and plan it out several purchases ahead.
For example $600K, ends up with the following land tax by state and structure.
Entity: Queensland, Victoria, NSW
individual: $500, $975, $2788
trust*: $5700, $2938, $9600
*Individual rates apply for SMSF & Units trusts in Vic and NSW
Then it just gets crazy if you are looking at over $3mil.
I’m looking at buying a block of units so its hard to not end up with a large land value in a single entity.
Land tax is such a dodgy wealth tax and I hate the idea of paying it. In hindsight I should have spilt my properties in Melbourne across more trusts (and even in individual names) as I am probably paying $10-15Kpa too much in land tax as a result. I don’t want to make this mistake in QLD.-
This reply was modified 9 years, 7 months ago by
Char. Reason: typo
I’ve asked Richard to comment as he is very knowledgeable on the topic. No doubt he’ll jump on tomorrow and comment.
As a separate issue, if you are planning to buy a block of units in your SMSF (and I assume you mean an unstrata’d block), expect the LVR to be low if you will be needing a loan for it. Also remember you will not be able to strata title an unstrata’d block while there is a loan over the property.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
In QLD individuals generally get the $600k threshold each. Non individuals, absent individuals all get a lower threshold of $350k each.
For a SMSF and a unit trust see schedule 2 of the land tax act QLD.
In QLD separate trusts each get a threshold, but there is a trap for young players here so get advice.
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
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This reply was modified 9 years, 7 months ago by
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