Land Tax Update

By Peter Vickers Business Group | small business, Accounting, tax |

Land Tax Update

In New South Wales land tax is payable on land with a total unimproved value of $734,000. The rate is $100 + 1.6% of the excess over $734,000. If the land value is over $4,448,000 then the rate is $56,724 + 2% of the excess over $4,448.000.

Your principal place of residence and primary production land are exempt. Like all taxes there are extra complex rules in respect of trusts, boarding houses and low cost accommodation, foreign ownership, related companies and trusts, SMSFs. The ownership point was midnight 31 December 2019.

The Office of State Revenue is sending emails to landowners suggesting that you deal direct with them. The list of issues that were just mentioned above indicates that the notices should come to us for checking. We have over the years picked up issues that need resolution and there is no way clients can do that themselves.

The perils of not consulting an adviser

As noted above, landowners are now receiving emails directly from the Office State of Revenue. Whilst this may initially seem appealing to reduce professional service fees, be warned that this is at your peril.

Already we have aided clients who have unknowingly been caught out by the Office State of Revenue. One client was unknowingly paying the extortionate foreign person charges believing this was the correct fee, despite having permanent residency in Australia.

In another instance, a family was buying commercial property. The funds bonds were coming from their family company. Usually you buy property in your individual names to get the 50% capital gains tax deduction. However in this case, to do that either the company would have to lend the individuals the money under a DIV 7A loan agreement or the company would have to pay them a dividend and then pay the appropriate 25% income tax on that dividend.

In this case we set up another company but with different family members so as to avoid the land tax grouping provisions. No interest has to be charged on a loan from one company to another, thus avoiding DIV 7A dividends.

Have you heard about the proposed Superannuation Guarantee Amnesty? We explain how the Bill will affect employers and employees.

If you’d like more information on how to grow your business, please contact one of our accounting and tax experts using the button below.


Join our newsletter subscription


Suite 2, 345 Pacific Highway,
Lindfield, NSW 2070

T: 61 2 9496 2300

Peter Vickers Insurance Brokers

Suite 2, 345 Pacific Highway
Lindfield NSW 2070
T: 1300 784 011


Suite 3, 31 Brabyn Street
Windsor, NSW 2756
T: 61 2 4577 4455

Follow us on Social Media   

© Copyright 2018 VICKERS GROUP Pty Ltd | 1300 784 011 | 02 9496 2300 |  Privacy

Follow us on Social Media   

Chartered Accountants Liability Limited by a Scheme under the Professional Standards Legislation - AFSL 229302  |  Peter Vickers Insurance Brokers Pty Ltd AFSL 229302 ACL 229302
Peter Vickers Insurance Brokers is part of the Steadfast broker network.