Paying Land Tax (WA)

• 

  Glider on 01/12/2015 - 21:41

  +2

  Yes you are. You are the owner of the property as shown on the title, and therefore the title holder. The bank is not the owner but they have an interest so they hang onto the title document as security.

  The bank doesn't pay your rates or water bill for the second property, do they?

  • 

    cryptos on 01/12/2015 - 22:00

    Hi Glider, Not sure I understand the relevance of rates and water bill? Your comment seems to imply that the bank pays land tax if they have a mortgage on a property, I couldn't imagine a bank paying that.

    I know the bank holds the title as security, my question is that if this is a second property, owned outright, can I avoid land tax by having a mortgage against it?

    • 

      ozhunter on 01/12/2015 - 22:26

      +1

      Why would you think that would allow you to avoid land tax? Although the bank holds it as security, it is your name on the title.

    • 

      arescarti42 on 01/12/2015 - 22:45

      +1

      Just because there is a mortgage on the property doesn't mean you don't own it. Your name is on the title, you're the owner, and you're liable for land tax.

      The bank doesn't own your house just because they physically hold the title, imagine how ridiculous that would be in practice.

      • 

        cryptos on 01/12/2015 - 23:01

        As stated on the state rev website

        "An owner includes:

        a person who holds the freehold title to land; "
        

        I read this as a person who has paid off their property and has the title in their possession as opposed to someone who has a mortgage and the bank has the title. See below, "freehold" sound like you own it outright..

        Q What is freehold title?

        A Freehold title means the land owner (and any of their beneficiaries) owns the property outright in perpetuity (which is legalese for “until the world ends”).

        I get what you're saying, this is why I'm asking as this is not my area of expertise

      • 

        ozhunter on 01/12/2015 - 23:05

        +1

        @cryptos:

        Your name is on the title as the owner, regardless if you have possession of the title and regardless if you have a mortgage on it.

        Do you think if a stranger picks up the title, he becomes the owner of it because he "holds" it in his hand?

      • 

        Hitstachbachman on 01/12/2015 - 23:51

        @cryptos: freehold just means that you're not paying lease on the land every 100 years or so. You technically are the land owner regardless of whether you have paid off the mortgage. The bank doesn't own the property - they just have a right to recover funds if you default on the mortgage by selling it off. The lawyers told me that you get charged land tax (in nsw anyway) if at the end of the year, the owner of the property is not the same party residing at the property and the land value is over four hundred and something hundred thousand (I forget the actual value and this may vary by state).

        Note: I am not a property expert. Just recounting what I have learnt from experience.

      • 

        cryptos on 02/12/2015 - 00:23

        @Hitstachbachman: Thanks, that's an answer for me.

        "The lawyers told me that you get charged land tax (in nsw anyway) if at the end of the year, the owner of the property is not the same party residing at the property and the land value is over four hundred and something hundred thousand (I forget the actual value and this may vary by state)."

        $300000+ in WA

      • 

        arescarti42 on 02/12/2015 - 21:43

        @cryptos:

        This is incorrect. You can have freehold title to a property and still have a mortgage against it. Freehold simply refers to the type of tenure, and means that you have rights to the property on a permanent basis.

        This is in contrast to leasehold title, which grants rights to the property on a temporary basis (i.e. for a defined length of time).

        The person with the freehold title is the owner of the land, and is subject to land tax. In this case, that sounds like you.

      • 

        cryptos on 02/12/2015 - 23:47

        @arescarti42: Thanks

    • 

      Glider on 02/12/2015 - 10:44

      +1

      To clarify, my comment says that you are the legal holder of the title, which is not the same thing as the physical holder of the title. As the legal holder of the title you are the one who pays for all of the expenses associated with it. A mortgage makes no difference at all.

      My point about the rates and water bill is that those are charges incurred by your property, and since you are the property owner you pay them. The bank does not pay those bills, nor do they pay your land tax bill.