Commercial property investors face higher land tax bills with NSW values up 3.93%
NSW investors - including SMSFs - with business premises will be the hardest hit when it comes to fresh 2014 land tax bills following the latest NSW land valuations.
Land values are up typically 3.93% for the 82,000 business zoned properties across NSW. The total land value of business premises is $85 billion equating to around $1,040,000 per property.
Interestingly the state's 38,000 industrial holdings fell 0.44% along with the 288,0000 non-urban category properties which were down 0.63%. There are 38,600 industrial properties with a combined $35.8 billion land value.
The bulk of NSW's 2.47 million properties are residential where there was a 3.21% increase. There was a typical $378,000 land value for residential property.
The value of 2.47 million properties around the state exceded a record $1.003 trillion.
“This is the first time that the state’s total land values for rating and taxing has exceeded a trillion dollars,” Mr Western said.
Every year approximately one third of Local Government Areas (LGA) receive new valuations to assist with their rates modelling. Some 774,000 notices of valuations will be sent to ratepayers in 57 LGAs this month, showing the value of properties based on market conditions as at 1 July 2013.
For 2007 and subsequent tax years, the value used to determine land tax liability is the average of the land value for the current tax year and the land values for the previous two years.
Land used as both principal place of residence and for non-residential purposes (e.g. as a retail plant nursery business, a horse stud or tennis court hire), are eligible for a reduction in land tax for the proportion used as the residence.
The Real Estate Institute of New South Wales says land tax forces up rents, directly for commercial property and indirectly for housing.
The state government uses the valuations to assess land tax and for the compulsory acquisition of land. Councils use them to determine rates.
Land tax is $100 plus 1.6 per cent of the land value of investment properties above the $412,000 threshold. The premium rate threshold occurs at $2,519,000 at $33,812 for the first $2,519,000 then 2 percent thereafter.
