Understanding Land Tax in NSW: What Property Owners Need to Know

#home
#insights
#market
#advice
#investors

Heidi Htut

•

If you own property in New South Wales—or are considering investing—you may have heard of land tax but aren’t quite sure how it works or whether it applies to you.

Land tax is a NSW State Government tax calculated annually on the unimproved value of land (excluding buildings). The good news? Your principal place of residence is generally exempt. Land tax usually applies only once your investment land value exceeds a certain threshold.

Understanding how land tax works is essential, particularly for investors, developers, or anyone building a property portfolio. Let’s break it down.

Who Pays Land Tax in NSW?

If you only own and live in your home, you typically won’t pay land tax.
However, land tax may apply if you:
  • Own investment property
  • Own multiple properties
  • Hold property via a trust or company
  • Rent out a former principal residence
For the 2025–2026 land tax year, the thresholds are:
  • General threshold: $1,075,000
  • Premium threshold: $6,571,000
All non-exempt land values are added together to determine whether you exceed the threshold.
Ownership structure matters — trusts, companies, and joint ownership can affect how land tax is assessed and whether thresholds apply.

Land Tax Exemptions in NSW

You may be exempt from land tax if the land is used for:
  • Your principal place of residence
  • Primary production (e.g. farms)
  • Charities or non-profits
  • Aged care facilities
  • Boarding houses or childcare centres
Eligible build-to-rent developments may receive a 50% land tax reduction.
All exemptions must be applied for through Revenue NSW.

How Is Land Tax Calculated?

Land tax is based on the average unimproved land value over three years, as determined by the NSW Valuer General.

Example:

Year                                           Land Value
2024                                          $1,050,000
2025                                          $1,100,000
2026                                          $1,150,000
Average value: $1,100,000
Taxable amount: $1,100,000 − $1,075,000 = $25,000
Land tax payable: $25,000 × 1.6% + $100 = $500
Land tax applies to land owned at midnight on 31 December each year.

When Do You Pay Land Tax?

  • Notices are usually issued from January
  • Payment is due within 60 days
  • Payment options include BPAY, direct debit, or card
  • Interest-free payment plans may be available
Even if you sell the property early in the year, land tax is payable for the full year.

Recent NSW Land Tax Changes

Recent reforms include:
  • Frozen land tax thresholds from 31 December 2025
  • Foreign owner surcharge increased to 5% of land value (no threshold)
  • Stricter principal place of residence rules (minimum 25% ownership)
These changes mean more investors may now fall above the threshold.

How Land Tax Affects Different Owners

Single Investment Property

  • Below threshold → No land tax
  • Above threshold → $100 + 1.6% of value above threshold

High-Value Landowners

  • Premium threshold applies once land value exceeds $6,571,000

Joint Owners

  • Assessed jointly, then reassessed individually to avoid double taxation

Foreign Owners

  • Pay standard land tax plus a 5% surcharge on total land value

Helpful Tools & Resources

  • Revenue NSW Land Tax Calculator
  • Land Tax Online Portal
  • NSW Valuer General land value search
Each Australian state has different rules, so always check obligations for the state your property is in.

How C&R Realty Can Help

At C&R Realty International, we help property owners and investors make informed decisions with confidence.
Our team can:
  • Explain how land tax may affect your property
  • Assist investors entering or expanding their portfolio
  • Connect you with trusted property managers and professionals
If you’re considering buying, selling, or investing in NSW property, speak with our experienced team today.

Read More