How to Avoid Paying Land Tax

If you know somebody buying an investment property this weekend, suggest that they request an 8-week settlement period so they can avoid Land Tax, which is payable on investments that you own at midnight December 31st.

Requesting a January settlement should be easy to do if the vendor’s selling their home. If it’s their investment property they’d probably want to settle prior to New Years’ for the very same reason, but you can try!

Land tax is the deadly cost of owning investment properties in NSW, charged when your total land value exceeds $734,000. An annual 1.6% of say $1M is $16,000, so it’s pretty harsh.

Some unrepresented people unfortunately buy their first investment property in a Family Trust, where there’s no threshold. I see it all the time.

Once you’re in Land-tax-land (as well as your partner if you have one), consider buying in a Self-Managed Superfund. Besides the enormous tax benefit and asset protection Super provides, it gets its very own Land-Tax Free threshold.

Tina and I set up our SMSF to buy the iChoice building 2 years ago, rather than buying it in our personal names. We’re better off by $29,000 a year thanks to the beneficial tax treatment. That’s because the $90,000 per annum rent paid provides us a 47% tax deduction yet only gets taxed at 15% inside Super. The $11,000 annual Land Tax savings is just a bonus.

Alas, I digress.

Next Monday I settle on a little townhouse I bought in the Gold Coast for $380K, which thinking about it I might just keep ‘vacant’ for a couple months! Anyway, buying interstate is another way to get around Land Tax.

Very proud of the efforts of my team to again be awarded Best Small Brokerage in NSW for the 3rd Consecutive year.

We had an absolute ball at the Hunter Valley last weekend and are all very grateful for the support and trust we have received from so many medical professionals over the years. We love supporting you right back.

Hope you’re gracefully seeing out 2019 and looking forward to being your very best in 2020. I turn the big 5-0 next year, but hey I’m well ready for it, I think …