Month: March 2024

Is your bank offering you the best interest rate?

Our lenders are sharpening their interest rates, currently 6.14% PA on home loans and 6.29% PA on investment loans, both principal and interest repayments.

Rates are based on Loan to Value Ratio (LVR), so reach out to us NOW.

Learn more about how we can help you by calling us on (02) 8383 4466 and requesting a callback or making an appointment with the YML Finance Team.

How can YML help?

Talk to our YML Finance Team today to see how YML Group can assist you with your loans. For more for more information, view our website and contact us on (02) 8383 4466 or by using our Contact Us page on our website.

Landholder Duty – Changes to the Ownership Percentage Threshold

Landholder duty (formerly stamp duty) in NSW changed under the Treasury and Revenue Legislation Amendment Bill 2023 (NSW) which passed on 21 September 2023. The changes to landholder duty affect both private unit trusts and wholesale unit trusts, effective 1 February 2024.

Landholder duty is charged on NSW land purchased with an unencumbered value of $2 million or more, held by private entities and private unit trusts

From 1 February 2024 the landholder duty ‘significant interest’ threshold for private unit trusts was reduced from 50 percent to 20 percent – thus, land transactions of 20 percent or more to private landholders under a private unit trust scheme will be subjected to landholder duty.

Investors, including self-managed superannuation funds (SMSFs), will also be required to pay landholder duty when they acquire a 20 percent or more ‘significant interest’ in a private unit trust.

Private companies will continue to have a 50 percent threshold before landholder duty is applied.

Public landholders will continue to have a 90 percent threshold before landholder duty is applied.

What option is available to increase the threshold?

Under transitional provisions within the Treasury and Revenue Legislation Amendment Bill 2023 (NSW), from 1 February 2025, a private unit trust scheme may apply to register as a wholesale unit trust – whereby the landholder duty ‘significant interest’ threshold is restored back to 50 percent.

Applications for registration as a wholesale unit trust must be made prior to 1 May 2024 and be approved for NSW land acquisitions made on or after 1 February 2024 to qualify for the 50 percent landholder duty threshold applicable to wholesale unit trusts.

Qualifying criteria to register as a wholesale unit trust must be met by private unit trusts applying for wholesale unit trust registration, two key criteria being:

Next Steps

It would be prudent for investors who acquire NSW land to check the unencumbered value and whether they are acquiring a ‘significant interest’ to ensure that correct and timely landholder duty is paid from 1 February 2024.

Additionally, private unit trusts might decide to transition to a wholesale unit trust via registration to benefit from a higher ‘significant interest’ threshold next year from 1 February 2025. YML Chartered Accountants can assist those investors with registration before the 1 May 2024 cut-off.

How can YML help?

Talk to our YML Legal Team today to see how YML Group can assist you with your landholder duty obligations. For more information, view our website and contact us on (02) 8383 4400 or by using our Contact Us page on our website.

Land Tax Change – Provisional Primary Residence Exemption

Under the Land Tax Management Act 1956 in NSW, a principal place of residence (PPR) refers to the one place of residence, whether within Australia or overseas, that is purchased by an individual or more than one person, any one or more of whom may occupy the residence and be deemed owners.

In Australia, land tax is a state-based tax. In NSW, land tax is payable on all properties, however some exemptions may apply.

In the case of a principal place of residence, if an owner has less than 25 percent interest in the land and meets certain qualifying criteria, then they may still claim a land tax exemption. This exemption can provide financial relief to individuals who may not own their land outright but still occupy it as their principal place of residence. Furthermore, the PPR land tax exemption, where applicable, may be claimed by any and or all joint owners of a PPR.

Generally, the requirements for this exemption are that you must:

What is a transitional provision?

A transitional provision is often put in place to ease the transition from one set of rules to another. It usually applies for a limited time. An exemption such as the current land tax exemption for owners of a main residence can likely provide temporary financial relief during the transitional provision period.

How might this transitional provision affect you?

If you have a principal place of residence and usually claim a land tax exemption despite having less than a 25 percent interest in the land, then you can continue to claim this exemption for the 2024 and 2025 land tax years. Thereafter, the minimum 25 percent ownership requirement will apply from the 2026 land tax year going forward

Can a ‘foreign person’ also claim the land tax exemption?

Yes, a foreign person may claim the PPR land tax exemption for owning and occupying a PPR, however the surcharge land tax payable by foreign persons is not exempt and will be assessed and subsequently payable by a foreign person on land owned. Furthermore, if a foreign person has a PPR in a foreign country and only one PPR is exempt, further conditions need to be satisfied to claim the PPR exemption in NSW.

How to claim the land tax exemption this year?

Reach out to us at YML Legal and we will assess and review your residential property ownership to determine your qualification for this year’s temporary provisional land tax exemption.

How can YML help?

Talk to our YML Legal Team today to see how YML Group can assist you with your land tax exemptions. For more information, view our website and contact us on (02) 8383 4400 or by using our Contact Us page on our website.