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Land tax question

Discussion in 'Accounting, Tax & Legal' started by Jacque, 17th Feb, 2006.

  1. Jacque

    Jacque Team InvestEd

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    One for you Nick :)
    Just received my land tax bills on two properties for NSW for the 2006 tax yr. However, the land values are exactly the same as the previous year. I can't believe that they haven't been adjusted down- is this right? How can they possibly value it the same? If I tried to sell one of these places with the cost of the modest building on top, I know I wouldn't get anywhere near what the land value is purported to be. :confused:
     
  2. Tzaki

    Tzaki Well-Known Member

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    They haven't been adjusted DOWN so that the amount of land tax does not go DOWN!

    Just my cynical point of view! :D
     
  3. Nigel Ward

    Nigel Ward Team InvestEd

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    Why not appeal?

    I'll leave the obvious gag alone :p

    N
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I wouldn't assume there is any direct correlation between land value (the calculated value of the piece of land) and saleable value (what you could sell the property for on the open market).

    Land value is a contrived calculation based on land use, land size and how bad the state government's budget is looking :rolleyes:

    It's not unusual to see improved property sell for less than the land value.

    ... and I would be very surprised to ever see the calculated land value decrease.
     
  5. Tzaki

    Tzaki Well-Known Member

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    Yep, I was thinking along the same lines Sim
     
  6. Jacque

    Jacque Team InvestEd

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    My appeal will be along the lines of the very fact that this tax is not necessary at all and is outmoded and due to be kicked off the NSW state govt coffers :mad:
    I'm sure the OSR will take a lot of notice! :D

    I do feel sorry for ppl like the following when it come to land tax, however:

    Maria and her husband bought 5 acres of land back in 1983 in Box Hill, a far flung area of outback Sydney (at the time). The intention was to keep it for their retirment, where they would move from their current Seven Hills home onto some land and build something nice. They borrowed the money, paid it off over several years (and went without lots of nice things to do so) and then, unfortunately, the husband died.
    Maria kept the land as, even without an income being derived from it, there was now no mortgage. A neighbour kept horses on it, and for this, agreed to keep the fences maintained and the weeds controlled.
    The first land tax bill Maria got (two yrs ago) was $2,500. She was unprepared, but managed to pay it, as she still works two days a week and had some savings. This year, however, with the escalating land valuations, her bill is a whopping $12,000. To say she is shocked is an understatement. Her bank balance won't cover it, and it looks as though her family are going to have to take out some type of overdraft to help her out. The same thing will happen next yr, and the yr after and the yr after that.
    All this for a piece of land that she went without with to obtain, has fully paid off and has quietly looked forward to sharing with her children in her twilight years.
    I ask you: Is this fair? The State govt has much to answer for, when they are taxing asset rich (but cash poor) land owners to the hilt and then some, for the very privilege of buying land in our fair state.
    There has to be a better way.
     
  7. Up- Beat

    Up- Beat Member

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    Well said Jacque, it is just criminal!!
    Maria sounds like she has had enough worry in her life, losing a husband and now trying to fund a huge land tax bill for something she's worked hard to pay off.
    Sounds like she may be forced to sell if the family are unable to help her out and in this market??
    MAKES MY BLOOD BOIL!!!

    _______________________________
    Up Beat
     
  8. Jacque

    Jacque Team InvestEd

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    And, unfortunately for people like her, the land tax bills are only going to increase each year or, at best, remain the same.
     
  9. NickM

    NickM Co-founder Staff Member

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    Land tax Sux
    it is regressive and stops the investor from progressing.
    Unfortunately all state governments see it as a great source of revenue.

    The only way Maria could reduce her land tax is to look at the rural land exemptions. It would need to be income producing and be zoned rural.

    sorry Jacque cant help.

    Best chance could be to pop across the road and see Michael Costa with a box full of Greek sweets and plead nicely :D

    NickM
     
  10. Jacque

    Jacque Team InvestEd

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    Ah, so it's sweeties that talk in Greek, hey? :D :D :D
    If only it were that easy.... :)
    Thanks for the reply Nick. It's given her some food for thought anyway. Where there are problems, there are always solutions. I remain an optimist, despite my bank balance being severely depleted this week....
    At least I can actually now say I'm working for the govt!! :rolleyes: