Our "rates" or property taxes are up 30% from last year! Presumably this is partly because of the shift in this state from stamp duty on buying a house (we paid $A 27,000 when we bought this house) to land taxes over time. Only the value of the land is taxed here in Australia, not the structure on it. For "townhouses" like ours - our house is actually a separate house - that are part of a body corporate (condo association) the land is valued as a share of the overall value of the land in the development. Our land share is only valued at $A168k, when a similar individual block in this suburb would be about $400k. So, this means our property tax is much lower than if we didn't live in a development like this. It's still $1,970 per year.
I just noticed that taxes on commercial property are outrageously high. The value in excess of $A600k is taxed at almost 5%. So you would pay about $A40k a year on land valued at $1 million.
3 comments:
I'm going to get hit by the same this year - also in a strata titled house in the ACT.
The change in land value and rating values is part of the story, but the big part is a change in methodology that was introduced in the last budget for unit entitlements (impacts anything strata titled, from apartments to townhouses).
Old methodology:
- Divide the unimproved value by the unit entitlement. Determine rates on this value.
New methodology:
- Determine rates off the unimproved value. Divide the rates value by the unit entitlement.
Rates are assessed on a progressive scale - i.e. the higher the value the higher the marginal rate. This means that the new methodology results in a higher sum in most cases.
In some ways its fairer - under the old system, the sum of the unit entitlements would pay less for the same property as a single owner. Under the new system, this is now the same.
However, one element that irks me is that for multi-unit titles, it seems that the UV has been adjusted upwards to reflect this. So now the multi-unit ratepayers get stung twice. For my example, the UV of my block (two townhouses) is 20% higher than the two surrounding single title blocks, despite similar land area.
I'm thinking of appealing the valuation on this basis to help lower the rates and potential land tax.
Thanks for the explanation. The value of our share of the total unimproved value is very low ($168k) compared to the price of a single block of the same size in this neighborhood (at least $300k).
Council rates, while based on the unimproved land valuation, or not 'land tax'. Try buying an investment property in addition to your primary place of residence, and you'll soon be hit by a real land tax (once you get over then 'threshold' amount. The amount varies from state to state, and each state calculates it separately -- one of the reasons many property investors will be interstate properties.
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