THE BEST WAY FOR PROPERTY INVESTORS TO AVOID PAYING LAND TAX ARTRICLE

The best way for property investors to avoid paying land tax: Ed Chan

By Ed Chan
Friday, 26 October 2012

Land tax is a state-based tax, meaning it gets charged by the individual states; therefore the rules, conditions and land tax thresholds differ from state to state.

Generally the first property bought in most states will be below their land tax threshold, such as an apartment (unless it’s a really expensive property), and subsequent properties bought in the state will be added to the first for assessment purposes. Generally by the second or third property the total land value will be pushed above that Sstate’s land tax threshold.

To eliminate paying land tax completely one could simply buy a single property where the land value is below the threshold and the second in another state and so on, which means you start fresh with a new land tax threshold in each state.

So, effectively you could have eight properties without paying land tax.

However having said that, it’s not a wise investment principle to invest solely for tax reasons. Tax reasons should never drive your investment principles.

It should be part of the consideration, but never the only consideration as there other key factors to take into account.

For example, it may be land tax effective to invest in a particular state, but that state could be at the peak of its property cycle, which makes that a poor investment.

To get an estimate of what the land value is one can look at the Valuer-General notices attached to council rates.

Land tax is self-assessed. In most states you will not receive a land tax notice from the Office of State Revenue reminding you of your obligations, and it’s up to you to voluntarily self assess and lodge a land tax return.

What happens if you don’t lodge a land tax return?

Well, no one will know in most of the states; however if you are unlucky you may get found out in a random audit and or when you decide to sell the property the buyer will want land tax clearance before taking possession of the property because land tax liability is transferred with the sale of the property.

In that case you will need to back pay all the land tax owed plus penalties and interest. This could be quite significant.

So it’s always best to lodge a land tax return, even if you are below the land tax threshold. Lodging a land tax return gets you registered in the system and you will receive a nil assessment notice each year which will avoid the situation where you were unaware that your land value one year had climbed above the land tax threshold and you were liable to pay land tax; the non payment attracts penalties, fines and interest.

Best regards,

Linda J. & Carlos Debello, LJ Gilland Real Estate Pty Ltd

Tel: (07) 3263 6085 | Mobile: 0409 995 578 & 0400 833 800 http://www.ljgrealestate.com.au

My latest G+:

My G+

Please consider your environmental responsibility. Before printing this e-mail message, ask yourself whether you really need a hard copy.

Confidential Email:- The information in this message is intended for the recipient named on this email. If you are not that recipient, please do not read, copy, distribute or act upon the message as the information it contains may be privileged. If you have received this message in error, please notify us immediately by return email. Thank you for your co-operation.

http://www.facebook.com/pages/LJ-Gilland-Real-Estate-Pty-Ltd/169194919788253

Removing the hassle from Sales and Rentals.

L J Gilland Real Estate PTY LTD

Office No:- (07) 3263 6085

Fax No:- (07) 3263 5985

Mobile No:- 0433 118 783

Email address: reception@ljgrealestate.com.au

PO BOX 19 ZILLMERE 4034

Confidential Email

The information in this message is intended for the recipient named on this email. If you are not that recipient, please do not read, copy, distribute or act upon the message as the information it contains may be privileged and confidential. If you have received this message in error, please notify us immediately by return email. Thank you for your co-operation

About http://www.ljgrealestate.com.au

Previous Board Member of Singapore & Malaysian Business Associations, BA Modern Asian Studies (GU) majoring in Economics & Mandarin, Licensed Real Estate Agent since 1996. Member of REIQ. Firm Member of Leading Property Managers of Australia. Our expertise at LJ Gilland Real Estate is your peace of mind. Our reputation lies in high performance property sales, and we take great pride in our excellence in property and asset management as well as body corporate management. We find individual solutions to fit our Clients needs. Being property specific rather than area specific because confining ourselves to one area simply wouldn't be giving you what you need. Specialties International Business negotiations, bilingual, Appraising Queensland Based Properties, Contractual negotiations, Dedicated to Family & Business, hardworking & focused to get the best outcomes for each and every Client.
This entry was posted in Uncategorized. Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s