Land Tax in New South Wales

In NSW, Land tax is an annual tax levied on the value of land you own that is above the land tax threshold.

There are a few things you need to know that apply to land tax including:

  • Who Pays Land Tax
  • How is Land Tax Calculated
  • Registering for Land Tax

Who Pays Land Tax

Whether you pay land tax will depend on the ownership and/or use of the land that you own.

Don’t be deceived by the name, land tax does not just apply to ‘land.’ You may have to pay land tax if you own vacant land, a house or unit, an investment property or holiday home, company title units or commercial property. Consult with Baker Love Lawyers for advice on these tax implications.

You do not pay land tax on your principal place of residence, primary production land, or land you own that is below the land tax threshold. There may be other exemption or concessions available depending on your use of the land.

You will be liable to pay land if you own property through a company or a trust, including your principal place of residence and other investment properties. Certain entities are liable to pay land tax and surcharge land tax such as a trust if any beneficiary of the trust is a foreign person or a foreign corporation and the trust owns residential land in NSW including Special Trusts and Discretionary Trusts. Trusts that may be eligible for the land tax threshold include a Fixed Trust, Superannuation Trusts, Trusts created by a Will, Family Unit Trusts, Concessional Trusts and Charitable Trusts provided that certain criteria are met, and the rules vary according to the type of trust. It is important to understand the type of trust to know whether the trust is eligible for the land tax threshold or liable for surcharge land tax.

How is Land Tax Calculated

Land tax is calculated on the total value of all your taxable land above the land tax threshold.

Land value is the unimproved value of your land.

The threshold for land values changes each year and are categorised as either ‘general threshold’ or ‘premium threshold’. For example, in 2023, the general threshold was land valued over $969,000, whereas in 2024 the general threshold was increased to $1,075,000. In 2023, the premium threshold was land valued over $5,925,000 whereas in 2024 the premium threshold was increased to $6,571,000.

Land tax is then calculated for the land values above these thresholds as follows:

  • General threshold: $100 plus 1.6 per cent of land value above the threshold, up to the premium threshold.
  • Premium threshold: $88,036 plus 2 per cent of land value above the threshold (2024 tax year).

The tax rates are progressive, meaning that higher-valued land incurs a higher rate of tax.

Registering for Land Tax

If you believe the value of all your taxable land is above the land tax threshold, you must register for land tax through Revenue NSW.

Once registered, you will receive an annual land tax notice of assessment for payment.

If you dispose of land, you must also notify Revenue NSW so that the land is removed from the assessment, particularly if the disposal of property places the value of your taxable land under the threshold and you are no longer liable to pay land tax.

Land tax obligations can significantly impact property investors, particularly those with extensive landholdings or high-value properties. It is essential for landowners to accurately assess their land tax liability and comply with reporting requirements to avoid penalties and interest charges.

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