Hello,
My long term plan was to fully own 4+ houses outright, move out of one of these, relocate to Asia and live comfortably off rent $2,400/w. Unfortunately I had not taken into account Principle Place of residence and land tax.
What is the most economical way to get around this issue.
If I rent out the house I am in now, it was cost me an additional $6k in land tax. But I want to live in Australia more than 50% of the time so I am paying the lower tax bracket. So for 5.5 months, do I just leave the house empty??Seems like I didn’t really think this through 8 years ago as land tax was not an issue when I only owned a few units.
Perhaps I should sell a house and buy, Big 4 Bank shares, and live off those dividends?
what states are the properties in? Hopefully not QLD!
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
all QLD
Well your early retirement has probably been derailed now
You need to look at the definition of ‘absentee’ in the land tax act and try to make sure you don’t meet this as your land tax bill will go through the roof.
Absentees are taxed like trusts. the threshold drops from $600,000 to $350,000, the rate is higher plus there is a surcharge on top 1.5% pa of land value
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
nice tip, under 6 months, that fits with our plans, so we would have to rent the house for a maximum of 5 months per year. And we can live in it for the remaining 7 months of each year?
There are 2 aspects to consider
a) making the property your PPOR for land tax – which requires you to live in it for 6 months prior to the assessment date -30 Jun I think, so you would need to move in by 30 Dec and live there continuouslyb) The absentee person test, probably won’t apply if you are living in the property for 6 months as that will mean you are in Australia and unlikely to be an absentee
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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