Land For Sale in Brisbane: Understanding Land Tax and Minimising It
Land tax is an annual tax levied on the owners of land in Queensland. It is a state tax that’s calculated on the freehold QLD land you own on the midnight of June 30 each year. If you plan to purchase land for sale in Brisbane, you need to familiarise yourself with the various land tax thresholds of the states so you can keep your obligations in check. The more you know, the less likely the possibility you’ll be surprised by a large unexpected bill.
Can land tax be a serious problem?
When you have only one or two properties in your portfolio, land tax is rarely a serious problem. However, as your portfolio increases, this type of tax can start to take a huge chunk out of your assets.
How do I minimise land tax payments?
Keeping in mind that land tax is based on the accrued value of all undeveloped land under your name, purchasing units with comparatively small land value can help decrease the land tax amount. That said, there are basically three ways you can lower your land tax payments.
- Spread your investment across several states
Say that you have four properties with land values at $200,000 each for a total land value of $800,000. If each property is located in a different state, you won’t have any land tax to pay because each land value is below the land tax threshold of each state, which is as follows:
- NSW – $549,000
- QLD – $600,000 for individuals, $350,000 for absentees, companies and trustees
- TAS – $250,000
- WA – $300,000
Likewise, if they were all in the Northern Territory, you also won’t have any land tax to pay. If they were all located in QLD, however, you’ll have to pay $2,500 as an individual, and $9,100 as a company, trustee, or absentee.
- Purchase units instead of houses
Due to the relative size and value of land to the overall value, a unit’s land value is much lower than a house. Thus, the former offers more opportunities for land tax savings. There are other expenses to consider though, so be mindful of them.
- Use different buying entities to purchase properties
Say that you own three properties—one you own directly, one you own with a partner, and one you own under a trust. You may not have to pay any land tax as there are three different entities to which the properties are under.
Talk to a Brisbane land for sale specialist such as Lion Land Marketing to see which method applies to your situation.
Sources:
Land Tax – A Tax You Can Plan To Avoid!, YourInvestmentPropertyMag.com.au
Land tax, QLD.gov.au
