All Topics / Legal & Accounting / how to reduce land tax

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  • Profile photo of petehepetehe
    Participant
    @petehe
    Join Date: 2007
    Post Count: 7

    Currently we have 4 properties under joint names (me and my wife), and obviously the land tax adds up, just wondering if we can reduce land tax if we change 2 properties to my name and other two to my wife’s name.

    Much appreciated

    Profile photo of abundantone10922abundantone10922
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    @abundantone10922
    Join Date: 2003
    Post Count: 10

    Not sure how land tax is calculated when property is in joint names petehe but every individual receives their own land tax threshold, so ultimately if the properties were in individual names, you would receive 2 x land tax thresholds. Also, an SMSF receives another land tax threshold….and if you were to start up subsequent SMSF’s, you receive additional thresholds. Hope that’s helped.

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    Depends on the state the properties are located in.

    In NSW joint owners are assessed on a single owner for land tax and then given a credit for properties they own on their own.

    e.g. $500,000 worth of land held by 2 people jointly is subject to land tax.
    $250,000 held each isn’t.
    $500,000 joint with X owning another house with $200,000 worth of land tax = Jointly liable on the first and X liable for $250,000 plus $200,000 = $450,000 which is just over the threshold.

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    Profile photo of petehepetehe
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    @petehe
    Join Date: 2007
    Post Count: 7

    Thanks for your replies. We are in Victoria

    Profile photo of TerrywTerryw
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    @terryw
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    Thanks for your replies. We are in Victoria

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    That is irrelevant.

    It is where the properties are that is important.

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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    Profile photo of petehepetehe
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    @petehe
    Join Date: 2007
    Post Count: 7

    thanks Terry, all the properties are in Victoria,

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

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

    As has been mentioned, a SMSF gets its on land tax-free threshold so this might be an avenue worth looking at if you intend to acquire additional properties.

    Jacqui Middleton | Middleton Buyers Advocates
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of RickRick
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    @rixter
    Join Date: 2003
    Post Count: 15

    The way I minimised Land Tax was to purchase certain types of dwellings and structure our property portfolio across a few different states around the country.

    We purchased villas and townhouses and kept our holdings under the Land Tax threshold for the state we were purchasing in, then we moved on to purchasing in other states doing the same thing in those states.

    I hope this provides some food for thought.

    • This reply was modified 5 years, 6 months ago by Profile photo of Rick Rick.

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    HamishBlair
    Participant
    @hamishblair
    Join Date: 2013
    Post Count: 10

    If the properties were held in separate trusts, would each trust get its own threshold?
    At what point does “grouping” occur?

    Profile photo of TerrywTerryw
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    @terryw
    Join Date: 2001
    Post Count: 16,213

    If the properties were held in separate trusts, would each trust get its own threshold?
    At what point does “grouping” occur?

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    Depends on the state. In NSW and VIC = no. In QLD maybe, it depends on how the trust is structured

    Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
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    Lawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://Terryw.com.au/

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