Hi everyone,
I am just wondering about the land tax and what is the implication for all the property portfolio investor.
The land tax is recently increased in Victoria. How do you guys handle this matter (especially if you have a portfolio in the property investment, ie, have more than 5 or 10 properties). Is that going you cost you more ??
And as a result of that, how do you manage to (still) have a positive cash flow ?? I do realise, if you have 400k property, u only pay hundreds of dollars. How about if you have 2.5m in value properties, you will pay 30-40k just for the land tax.
How do you manage that kind of thing, in order to reduce the tax (cost), be efficient and still be able to get a positive cash flow ??
Thank’s in advance.
You just have to factor it in, like any other tax.
You may be able to reduce it by setting up different trusts, but it cannot be eiliminated.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]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
Hi Leo,
Just remember land tax is levied on the unimproved value of the land so you need to only look at the land value from a tax issue.
As well as having different ownership structures you can also buy property beyond your state’s boundary. Research threshold levels and various ownership structures and you can minimise land tax.
It is also important to remember that when it comes to property investment – land tax is only a cost of doing business.
Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.….couldn’t stay away….[blush2]
Leo,
There have been detailed discussions on this subject many times.
Best thing I’ve found is to give it to the tenants to pay. This does wonders for the cashflows.
Land tax can be eliminated from your excel spreadsheet lines as a cost of ownership. It’s marvellous to delete the line.[biggrin]
However, don’t try this with your residential tenants in Australia…they’ll run a mile. Give it a go if you want, see what type of reaction you get. [angry2]
Would Baloo / aussierogue / Don & Liz and other people on the forum who choose to rent pay it for their Landlord ?? I think I could guess what the answer would be.
As other people have said, it’s just a cost of business…thing is, you don’t necessarily need to be in that particular business.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
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