How to save on your home’s property tax bill?
With its high prices and high property taxes, it can be hard to see how a home owner can afford to pay the estate tax they owe.
While the government offers an offsetting deduction, it is a very generous one.
And it doesn’t come cheap.
For instance, a house with an assessed value of $200,000 can be worth less than $250,000 if it is sold.
And a house costing $300,000 or more is worth $1.8 million.
The key to the estate taxes is to look at what you pay in your local tax, not just the federal government’s.
And if you have an interest in a property, you might be able to reduce your property tax liability by getting a lower interest rate.
What is an estate tax?
The federal government sets the tax on the value of a property and sets a threshold for how much you pay.
In NSW, for example, the threshold is $1 million.
For properties that have been assessed as being worth $2 million or more, it may be $3 million.
And for those with assessed values of more than $10 million, the tax is 15 per cent of the value.
What are the exceptions?
The state of Victoria is not a federal jurisdiction.
And NSW does not impose an estate taxes levy.
For the most part, NSW does the same thing for Victoria.
But you can get a reduction of up to 40 per cent if you are a NSW resident.
If you are living overseas, you can apply for a reduction.
And in New South Wales, you may be able do so.
The exception to this is for a property that is valued at more than a certain amount, for instance, $10.5 million.
What if you do not have any property taxable in NSW?
This is where you need to be careful.
For some property, there is no property taxable.
For example, a property with an unregistered value of less than one million but which is worth more than one $1-million property.
For that property to be taxable, you will need to make an assessment.
The assessment can take up to two years.
For property valued at less than a million but more than three million, you need an assessment that takes more than two years to complete.
And the amount of the reduction depends on the property, the amount you pay, and whether or not you have a home loan.
How much can you save?
The threshold for the estate sales tax is $250 million.
If the threshold for your property is less, the property tax levy can be reduced by more than 40 per a cent.
For more information on the estate sale tax, visit www.austinheritage.gov.au.
This is why a lot of people who are planning to buy a home might have to make a more aggressive assessment.
This can reduce your taxable property tax.
And you can also apply for the reduction of property tax if you already have a mortgage or have other income streams.
But if you only have a few properties, you are unlikely to have to do much of anything.
If your mortgage is more than half your taxable income, you should consider whether to apply for an estate sale reduction or if you should wait until you have enough income before you start saving.
What can I do to reduce my taxable property taxes?
There are several different ways to reduce taxable property values.
If there is a change in the property’s assessed value, such as an addition or removal of an element or other property, it’s a good idea to check the property records to make sure the value hasn’t changed.
If it has, there may be a way to offset the difference.
This includes an offset by making a lower payment.
For a house or apartment valued at $2.5-million, you would be able reduce the tax by 30 per cent, and for a $1m property, 35 per cent.
If a property is valued more than five million, it will have to be assessed.
You can do this by a tax professional, who will need a copy of the assessment and other information to verify the value is correct.
And by doing a simple tax calculator, you could calculate how much a reduction in property taxes would reduce your taxes by.
Find out more about estate sales taxes at austinheritance.gov