Forums / Property Investing / Help Needed! / Land Tax in Victoria

Find Out All The Details Of Steve McKnight’s New 90 Day Mentoring ProgramFor A Live 90-minute Webinar
Viewing 16 posts - 1 through 16 (of 16 total)
  • Profile photo of Melb InvesterMelb Invester
    Participant
    @melbinvester1
    Join Date: 2014
    Post Count: 38

    Hi All,

    How the land tax applies to Investment properties?

    MI

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    investment properties incur land tax if the value of the land exceeds a certain amount. This amount will depend on the type of owner and also the state the property is in.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Melb InvesterMelb Invester
    Participant
    @melbinvester1
    Join Date: 2014
    Post Count: 38

    Thanks, So what is the minimum can keep in each State without paying the tax?

    or is there way to minimize the Land Tax?

    MI

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    varies from state to state.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Melb InvesterMelb Invester
    Participant
    @melbinvester1
    Join Date: 2014
    Post Count: 38

    I’m in Melbourne and looking for some advice in Victoria

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    Check out the duties act vic

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Melb InvesterMelb Invester
    Participant
    @melbinvester1
    Join Date: 2014
    Post Count: 38

    HI All,

    Is anyone buying the IP’s in same state even they pay the Lad Tax? I have 4 IP’s in Vic and paying the Land Tax.
    Now looking into 5th IP and looking only CG areas ( 10-15KM Range)

    So what is the advice for invest in VIC or QLD?

    MI

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    Advice is not to look at land tax in isolation. No point buying somewhere with low growth only to avoid land tax.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    Victorian land tax rates are published here;
    http://www.sro.vic.gov.au/sro/sronav.nsf/childdocs/-34FAD0EFBAFF8BE0CA2575A100442101-C580F3A333F4AD44CA2575D10080AD1C?open

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of TkpurserTkpurser
    Participant
    @tkpurser
    Join Date: 2014
    Post Count: 5

    If the vic threshold for land tax bought by a trust is $25,000 then that is a huge amount of tax payable for ~4% over this value.
    If the trustee is a company then are the company directors subjected to this tax? Is there any way around this tax if buying via a trust?

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    I don’t think directors are personally liable (in VIC), but the trustee company is. However it has a right of reimbursement out of the trust property, both under trust law and under land tax legislation. Don’t forget land tax is a first charge over the land – beats even mortgages.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of TkpurserTkpurser
    Participant
    @tkpurser
    Join Date: 2014
    Post Count: 5

    Thanks TerryW.
    Just realised that it’s actually 0.375%. I read it as 3.75% so that’s a lot better than I initially thought!

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,190

    Much less than NSW which is 1.6% with no tax free threshold.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of CharChar
    Participant
    @charmaine97
    Join Date: 2015
    Post Count: 5

    I own 10 investment properties across 3 trust structures (with assessed land value of $3.8m) in Victoria and pay about $25k p.a. in land tax. It would have cost me less if they were spread across 2 individuals and some trusts, because of the trust surcharge, but a hell of a lot more if they were just in one trust.

    Essentially,$1 million in land value as an individual is the same land tax as $600k land value in a trust in Victoria.

    If I had my time again, I would have done this:
    $1 mil in my name,
    $1 mil in partners name,
    $1 mil in SMSF (land tax is the same rates as individuals),
    Then start with adding $600k in each trust, but no more.
    This would have only cost me circa $12k a year in land tax for $3.8m. My problem is I let my trusts get too high, when I should have started new ones – very short sighted, save $1,200 in set up cost and some hassle for each new trust, but then pay much much more each year on-going.

    Also, never, never use joint names- it stuffs up your thresholds.

    What I’m doing now is buying future investments in my own name or SMSF to stop my land tax from getting excessively high.

    Profile photo of Jacqui MiddletonJacqui Middleton
    Participant
    @jacm
    Join Date: 2009
    Post Count: 2,539

    In this regard, it is interesting to note that a person can have more than one SMSF.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
    Email Me | Phone Me

    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of Melb InvesterMelb Invester
    Participant
    @melbinvester1
    Join Date: 2014
    Post Count: 38

    HI Char,

    Wow 10 in Victoria and any more in other states?

    MI

Viewing 16 posts - 1 through 16 (of 16 total)

You must be logged in to reply to this topic.