Property, Trusts & Land Tax
By Jeff Banks
Property investment for legacy seeking investors will often include what we might term structural establishment – read here using a company or a trust.
For those looking for a champagne outcome on a beer budget, the option of using trusts and other entities, designed to limit risk with the added potential ability to avoid or dissipate capital gains tax across the family rather than in one lap, can appear costly. In my experience, one of the most misunderstood concepts in structuring investments is the cost versus benefit analysis, especially when it comes to land tax.
When it comes to property investment, legacy-seeking investors often opt for structural establishment, such as using a company or trust. However, navigating the myriad of regulations and taxes involved in these structures can be complex and overwhelming. That’s where Property Portfolio Solutions can help.
Our team of experts specialize in guiding clients through the intricacies of property investment and can assist in determining whether establishing a trust is the best course of action. One of the most misunderstood concepts in structuring investments is the cost versus benefit analysis, especially when it comes to land tax.
Land tax is a state government imposed tax on land owners, and the thresholds for individual taxpayers differ between states and trusts. Trusts, particularly discretionary or family trusts, may not enjoy any tax-free threshold due to the indeterminate distribution base. This means that land tax becomes an immediate cost of the investment.
While trusts may appear costly to set up and administer, and the added land tax may seem like an expensive strategy, there will always be rainy days ahead, such as a potential sale and capital gains tax issue. The income tax that can be saved through spreading a profit amongst many individual taxpayers may far outweigh any short-term costs involved in “getting there.”
At Property Portfolio Solutions, our experts understand the complexities of property investment and can guide clients through the maze of regulations and taxes. By taking the time to fully understand each client’s goals and objectives, we can provide personalised advice on the most effective investment strategies, including the use of trusts, to help clients achieve our financial goals and leave a lasting legacy.
Moreover, Property Portfolio Solutions emphasizes the importance of understanding each client’s “WHY” when it comes to property investment. By understanding the motivations behind an investment strategy, our team of experts can provide tailored advice that aligns with our
client’s values and goals.
For legacy-seeking investors, leaving a lasting legacy for our family and loved ones is often a key motivation. The use of trusts and other structures can be an effective way to limit risk and ensure the transfer of wealth to future generations. However, it’s crucial to consider the long-term implications and potential costs of these structures, and that’s where the expertise of Property Portfolio Solutions can be invaluable.
Our commitment to values such as integrity, empathy, transparency, and connection ensures that clients receive honest and trustworthy advice that prioritizes our best interests. Whether it’s navigating regulations and taxes, selecting the most effective investment strategies, or planning for a lasting legacy, Property Portfolio Solutions can provide the guidance and support needed to achieve financial goals through property investment.
Property investment can be a powerful tool for building wealth and leaving a legacy, but it requires a deep understanding of the complexities involved. By partnering with experts like Property Portfolio Solutions, investors can ensure that we have the knowledge and support needed to make informed decisions and achieve our financial goals.
Our catchcry is “Your legacy is Our inspiration” and our approach based on what inspires you, will make your legacy seem so much easier to achieve. We are easily contacted by going to our website www.propertyportfoliosolutions.com.au where the start or even the continuation of your property portfolio is made simple.
