Land Tax and CGT: A Brief Explanation
Land Tax and CGT: A Brief Explanation
Land Tax is a tax levied by the NSW State Government on individual and corporate ownership of land in NSW. A principle place of residence (PPOR) when it is used solely for residential purposes, it is generally exempt from land tax and land used for primary production or used by non-for-profit organisations is also exempt. The following types of assets are usually liable for land tax; vacant land, land where a house has been built, a holiday home, investment properties, company title units, residential, commercial or industrial units, including car spaces, commercial properties. It is important to remember that even land that is not generating any income is still subject to land tax.
The Land Tax Management Act 1956, details the imposition and collection of land tax on properties in NSW and the NSW Office of State Revenue carries out the collection of land tax. It is calculated by combining the value of all the taxable land you own above the land tax threshold, which for 2010 was $376,000. If the combined value of the land does not meet this threshold, it is exempt from land tax. In order to establish the value of land, the Valuer General makes an annual evaluation of the asset and you are able to object to this evaluation by writing to the Land and Property Management Authority.
Capital Gain Tax (CGT) applies to any assets acquired after September 1985. CGT must be paid when a CGT event occurs and this is generally in the event of a disposal of an asset. The Australian Taxation Office defines CGT as 'the tax you pay on any capital gain you include on your annual income tax return. It is not a separate tax, merely a component of your income tax. You are taxed on your net capital gain at your marginal tax rate.'
A CGT asset can fall into several categories. Some are more obvious like land and shares but can also include things like artworks, rare books, coins or postage stamps. If these items are acquired for under $500, CGT does not apply. Additionally CGT can be applied to 'personal use assets' such as a boat, furniture, electrical goods and household items. Any CGT on these items is disregarded if you acquire the item for $10,000 or less.
In a basic sense, CGT occurs if you received more for an asset than you paid for it. A capital loss is made if your reduced cost base is greater than your capital proceeds. Like land tax, CGT is not paid on properties that are the principle place of residence. It is possible to rent out your principle place of residence and not incur CGT, although it is a more complex process and will differ dependant to individual circumstances.
Let you know more about NFL team-New jersey Devils Payroll Tax Forms: What Is Form 941 And Why Must You File It? Set A Clear Goal For Playing Football In Nfl Football Jerseys The Basics of Inheritance Tax Law Alabama State Income Tax Calculator 2010 For Alabama Tax Filing Tax Filing And 2011 Tax Calculator Awareness Meade Accounting And Taxation Leads With Expert Tax Consultants Offshore Company Tax Benefits Brief on Tax forms, State taxes and Federal taxes Colorado State Income Tax Calculator 2010 2011 For Colorado State Tax Filing Wealth Building: Tax Reduction Secrets of the Wealthy Exposed Dynamics Gp Canadian Payroll 2011 Tax Update Notes Taxes on 401k Withdrawals