All Topics / The Treasure Chest / Victorain land tax

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of StephenArrowsmithStephenArrowsmith
    Member
    @stephenarrowsmith
    Join Date: 2002
    Post Count: 3

    Hi all

    My Partners and I am still considering WRAPPING as a valid win/win positive cash flow strategy and ,as we belive that we need to obtain a quantity of these to make it work ,aim to do about 40 within 1 year . The main issue we see is that as a holder of the titles each property be included in our Land Tax assesment and assuming $80 k per Purchase and assuming the unimproved value is 40k per purchase ) then we would be assesed on $1,600,000 which is $32,000 in land tax . If I try and pass this onto my WRAP Customers it is nearly $800 each , I don’t think that would work .
    As the Pre Tax $50 pw profit per WRAP is the aim then 40 WRAPS equals $104,000 pa , with admin and if land tax is applicable it brings the value down to hard o justify .
    I assume whomever has completed a high number of WRAPS would have encountered this problem .
    Anyone have any commenst on this .

    Profile photo of dr housedr house
    Participant
    @dr-house
    Join Date: 2001
    Post Count: 281

    Hi, I can’t comment on the wrap issue, but one way to minimize
    land tax according to my legal advisor is to have a separate trust for each property, therefore, each is in a separate entity and not in your name taxed as a whole.
    It costs apparently 500 to set up each trust but well worth it also in terms of liability issues.
    I think land tax is another one of those hugely regressive taxes and perhaps we should be starting to lobby the politicians about this.
    The cost of stamp duty is prohibitive enough.

    Profile photo of FWFW
    Member
    @fw
    Join Date: 2002
    Post Count: 478

    Hi Stephen
    I’m sure Steve is the expert on this, but I’ll have a go at outlining the way I believe he sets up his property wrapping structure.
    You set up a trust, with a company as trustee. Each trust buys a number of properties, up to the point where it’s “full” – I don’t know what prompts this, but I would imagine land tax is one factor.
    Then you set up another trust, with another company as trustee, and start again.
    Hope that helps.

    Keep smiling
    Felicity 8-)

    Profile photo of Steve McKnightSteve McKnight
    Keymaster
    @stevemcknight
    Join Date: 2001
    Post Count: 1,763

    Hi,

    One of the many things outlined in my Wrap Library is the treatment of Land Tax (in Vic.)

    Basically, if you know what you are doing you can avoid having to pay it at all. The solution has nothing to do with asset structuring – just about knowing the SRO system and how to use it to your advantage.

    Regards,

    Steve McKnight

    Steve McKnight | PropertyInvesting.com Pty Ltd | CEO
    https://www.propertyinvesting.com

    Success comes from doing things differently

    Profile photo of LUCJANROCZNIAKLUCJANROCZNIAK
    Member
    @lucjanroczniak
    Join Date: 2002
    Post Count: 1

    Hi Steve

    What is the SRO system.

    Luch.R

    Profile photo of FWFW
    Member
    @fw
    Join Date: 2002
    Post Count: 478

    Hi Luch
    SRO = State Revenue Office

    Keep smiling
    Felicity 8-)

Viewing 6 posts - 1 through 6 (of 6 total)

The topic ‘Victorain land tax’ is closed to new replies.