NSW Land Tax
NSW land tax applies to landholdings above the threshold — and trusts holding property are subject to a surcharge rate that significantly exceeds what individuals would pay. MGS Private advises on strategies to eliminate or substantially reduce this ongoing burden.
Why land tax in trusts
is so costly in NSW
Under the Land Tax Management Act 1956 (NSW), land held by a “special trust” — which includes most discretionary trusts — is taxed at a flat 1.6% rate on every dollar of land value, with no threshold deduction. For individuals, land tax is nil below the general threshold and graduated above it.
On a property with a $1,500,000 land value, a discretionary trust pays approximately $24,000 per year in NSW land tax — compared with approximately $6,900 if owned individually. That difference of $17,100 per year compounds every year the property is held.
The solution is converting the structure holding the property to one that qualifies as a “fixed trust” under the NSW Land Tax legislation — which is then taxed on the threshold basis equivalent to individual ownership. MGS Private has developed three strategies depending on the property situation.
Three Land Tax Strategies
Each suited to a different property situation
Paying NSW special trust land tax?
MGS Private can assess the optimal strategy for each property situation and calculate the annual saving.