Land Tax 2011 - Investment Properties
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For property held as at midnight on 31 December 2010, land tax is payable if the land value of your property is over $387,000.00 (but excluding any property which is your principal place of residence). Land Tax is payable on the land value of all taxable land at the rate of $100.00 for the first $387,000.00 in land value and thereafter at 1.6% of the remaining value.
In the case of a house or vacant land, "Land value" is the value of the land, ignoring the value of the house. It is not the purchase price of the property. In the case of a unit, "Land value" is the value of the land upon which the building has been erected. That value is then apportioned among the units in the Strata Scheme using the unit entitlement (see my comments above under the heading "Unit Entitlement"). The land value is not the purchase price of the unit.
As a result of a High Court of Australia decision concerning the taxing of unit trusts, nearly all unit trusts in NSW are liable to be assessed as ‘special trusts’ under Section 3A of the Land Tax Management Act 1956. Special trusts are assessed at the rate of 1.6 per cent on the combined taxable value of the land and are not entitled to receive the 2011 threshold of $387,000.00 and will be liable for land tax.
It may be necessary for you to lodge an initial Land Tax Return or a Variation, depending upon the circumstances. I would be more than happy to assist you in this regard or you might contact your accountant or the Land Tax Office directly on 02 9685 2155 or 02 9689 6200.
Disclaimer: The information in this article is correct as at 14 May 2011. This information is not to be taken as legal advice and at all times we recommend you seek independent legal advice regarding your own individual circumstances from your legal representative.
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