Trusts penalised by NSW land tax law

A higher land tax on property owned by trusts could create an investment exodus from Victoria similar in effect to the controversial NSW vendor tax. The National Tax & Accountants Association said new land tax provisions in New South Wales may increase land tax on trusts by up to 600 per cent. The new law comes into force from January 2006. Trusts will pay a higher rate of tax than individuals and companies. Land tax on trusts would kick in at $20,000, compared with a threshold of $200,000 for property owned by individuals or companies. Investors also face four or fivefold rises in land tax in property valued under $2.7 million.