I think in QLD is you are living in a trust property as your 'main residence' it may be exempt from land tax even though it is trust owned. However, I don't think this is the case in NSW. So even if you were living in your trust property as your main residence then it wouldn't qualify for the land tax exemption (or CGT main residence exemption).
Also, even though land tax may be deductible it is still a high cost. Imagine a cheap property with land valued at $300,000. That is approx $5,000 every year in extra tax which otherwise may be avoided.
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
I will be keeping our current PPoR as our main residence and selling within the 6 year rule. So it wouldn't be an issue for a while, but understand your concern.
We plan on having a few IP's within 5 years anyway, which will all be subject to land tax either purchased though the Trust or personally – am I right in assuming this?
If after the sale of our current PPoR and the Trust rental becomes our main residence, does it cease to be an IP of the Trust and will the interest on the loan still be tax deductable?
So many questions Terry – I apologise.
Its good that you retaining one property with the CGT free status.
That is true about the land tax. You will use up the tax free threshold soon if you keep buying properties so having a trust will not make much difference there as you will be up for land tax anyway.
When you sell the main residence in your personal name, then the trust property will still be an IP of the trust. This should not affect anything.
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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