5 Ways to Minimize Land Tax

Land Tax is a state impost and different states have different rules and thresholds. For every property investor Land Tax represents a significant cost to owning an investment property and you should always consider the impact of Land Tax when acquiring your next investment property. Here are five ways you can minimise land tax:

Purchase the property in the name of the person that hasn’t used the respective state’s threshold. For example, in a husband and wife ownership scenario, if the husband already has a property in his name – excluding your Principal Place of Residence (PPOR) – and has used up the threshold in that state, consider acquiring in the wife’s name to absorb a new threshold.

Consider an apartment. Apartments generally have a lower land component than houses therefore you should check the land component of the investment to determine whether you have reached the respective thresholds. You could potentially own a number of apartments before hitting the thresholds in some states.

Use a separate Entity like a Fixed Trust or company that entitles you to a separate threshold on each property. However, before acquiring the investment in these structures seek independent tax advice as tax treatment could be different than acquiring in your own name and each state has different rules for entities.

Consider the timing of sales and purchase on land and the Date of Assessment for Land Tax in a particular state. For example, if you are selling a property, ensure that you settle prior to the Land Tax assessment anniversary. If you are selling property just be mindful that you may still be obliged to pay the Land Tax for the following year if you have not settled before this date.

Acquire properties in several states. If all properties were owned in the one state, let’s say NSW, you would normally exceed the Land Tax threshold. If however you spread your investment properties over a number of states then there would be less Land Tax to pay.

This is general information, please seek tax advice from a specialist accountant who understands the complexity of Land Tax in different states for your specific circumstances. We buy houses in Apopka

Adding Value To Your Home With A Granny Flat

If you have excess space sitting on your property, or perhaps bought a new piece of land and are not sure how to make the most of it, there are some great options available to you. You could landscape this yard space, or perhaps construct something for the kids. But when you really want to add value to your home, there is one task that proves very popular right across the nation – building a granny flat.

Boost your property’s value

A Speedy Addition to Your Home

If you have excess space sitting on your property for sale, or perhaps bought a new piece of land and are not sure how to make the most of it, there are some great options available to you. You could landscape this yard space, or perhaps construct something for the kids. But when you really want to add value to your home, there is one task that proves very popular right across the nation – building a granny flat.

When you wish to make renovations or additions to a home, one of the biggest impediments can be red tape. Applying for permits and getting permissions from councils can be time-consuming and costly. However, with a granny flat, the process can be incredibly simple.

For example, the NSW Planning Department notes that councils and local government can now approve a granny flat within 20 days of an application. And in Western Australia, the state government recently streamlined the process so planning approvals for granny flats are not needed at all! So if you are interested in doing this it’s worth looking into your local council regulations.

But How Much Value Does it Add?

The amount of value that a granny flat will add to your home varies depending on the property, but in a recent Sydney Morning Herald article, RPG Valuers principal Ron Gedeon suggested that it could add 20 per cent to 30 per cent of what it cost to the bottom line of your home straight away.

However, it is important to be careful and make sure you are using the space appropriately – you do not want a granny flat that dominates your land or removes every single piece of green space you have. Consider whether an internal or external construction is going to work best from your property and work from there. You could also turn your garage or unused space under the house into one if you don’t have the room on your section.

Income Increase – Incredible!

One of the big benefits of owning a granny flat is the rental income you can generate . While the flat can be a handy room for the in-laws or children to stay in when the time comes, you can make a tidy profit by renting out your granny flat, greatly augmenting your rental yields.

As an example, if you have constructed a $100,000 granny flat on a property in a popular area, you might be able to make upwards of $400 per week in rent. This sits only marginally below the median rent across Australian capitals for the September quarter, which was $430 according to CoreLogic-RP Data.

Clearly, there is huge value to be found in a granny flat. Talk to your local experts about how one could boost your property – and your bank balance!