As a buyers agent engaged by investors to locate and buy suitable properties for them, we often ask the question “will land tax affect your decision to invest”?
While buyers budget their buying costs, interest payments, property management fees, council rates, water, strata levies and maintenance, there remains one other and sometimes ignored cost that investors do not budget for, namely the NSW land tax also referred to as investment property tax.
Australian land tax began back in 1910, when a land tax was introduced by the Commonwealth Government.
Times have changed, yet most Australian state governments are still collecting this tax despite the changed circumstances from its original intentions.
NSW investors need to be aware of the possible applicable land tax when buying property.
Land tax is calculated on the combined value of all taxable unimproved land you own, above the current threshold. This includes land owned jointly with another party.
Naturally, any purchaser of NSW real estate should be seeking advice from their accountant, legal advisor and/or financial planner or at least visit the office of state revenue site.
When considering ongoing property costs, land tax needs to be factored in and planned for, especially if the investor is planning to purchase more real estate in the future.
