Whether you need to pay land tax on your property depends on:
- the type of land
- what it’s used for, and
- its total value as at midnight on 31 December each year
- whether you meet the definition of a foreign person for land tax purposes.
Exemptions and concessions
In general, you do not have to pay land tax on:
- your home, known as your principal place of residence
- your farm, known as primary production land
- any of your land if the total taxable value is below the land tax threshold.
Read more about land tax exemptions and concessions.
When land tax does apply
Land tax applies to other property you own if the total taxable value of your land is above the land tax threshold. You may have to pay land tax if you own, or jointly own:
- vacant land, including vacant rural land
- land where a house, residential unit or flat has been built
- a holiday home
- an investment property or properties
- company title units
- residential, commercial or industrial units, including car spaces
- commercial properties, including factories, shops and warehouses
- land leased from state or local government.
Land tax applies regardless of whether income is earned from the land.
Land tax assessment
Rates and thresholds
Land tax is calculated on the total value of all your taxable land above the land tax threshold.
The threshold for the land value changes each year and is applied as follows.
- General threshold: $100 plus 1.6% of land value above the threshold, up to the premium threshold.
- Premium threshold: 2% of land value above the threshold.
- The threshold is published by the Valuer General(new window) in October each year and applied to land holdings on 31 December each year.
- Land tax is applied for the full year following the taxing date of 31 December and no pro-rata calculation applies.
|Year||General threshold||Premium threshold|
How land tax is calculated
You pay tax based on the combined value of all taxable land you own, not on each individual property. If the combined value of your land does not exceed the threshold, no land tax is payable.
If the value is above the land tax threshold, you will only need to pay tax for the amount over the threshold, plus a base tax of $100.
When land tax is calculated
Your liability for each year is based on the value of all property you owned on 31 December in the previous year. Any changes to the land you own in the current year will only affect how much you pay next year.
If the ownership of any of your land changes, you’ll need to notify the NSW Government using Land tax online(new window).
Sample land tax calculations for 2019
(A minus B) multiplied by C plus D = Land tax payable.
- A is the total land value = $740,000
- B is the land tax threshold for 2019 = $692,000
- C is the land tax rate = 1.6%
- D is the standard tax = $100
- ($740,000 minus $692,000) x 1.6 % + $100 = $868
Premium land tax calculation
(A minus B) multiplied by C plus D = Total premium land tax payable.
- A is the total land value = $4,780,000
- B is the premium land tax threshold for 2019 = $4,231,000
- C is the land tax rate = 2%
- D is the maximum basic land tax payable = $56,724
- ($4,780,000 – $4,231,000) x 2% + $56,724 = $67,704
Special trusts land tax calculation
A multiplied by B = total special trust land tax payable.
- A is the total land value = $750,000
- B is the land tax rate = 1.6%
- $750,000 x 1.6% = $12,000
Note: A premium land tax marginal rate of 2% applies for special trusts on the total taxable land value above $4,231,000.
How land is valued for land tax
The Valuer General(new window) determines the value of all land in NSW annually.
- Values are determined as at 1 July for the upcoming land tax year.
- The value is based on the average value from the current year and the past two years.
- Where the parcel of land was created less than three years ago (eg via subdivision or amalgamation) the Valuer General only takes into account the years after it was created.
- If you are a foreign person who owns residential land in NSW, you must pay a land tax surcharge.
Example: how land is valued for land tax
|Year||Your land value|
|Average value||($830,000 + $910,000 + $930,000)/3|
Your average land value for land tax purposes in 2019 is $890,000.
Find out more about the method for valuing land(new window).
Residential land includes any of the following.
|Parcel of land||On which there are one or more dwellings, or a parcel of land on which there is a building under construction that, when completed, will constitute one or more dwellings.|
|Strata lot||If it is lawfully occupied as a separate dwelling, or suitable for lawful occupation as a separate dwelling.|
|Utility lot||If its use is restricted to the owner or occupier of a strata lot.|
|Land use entitlement||If it entitles the holder of the land use entitlement to occupy a building, or part of a building, as a separate dwelling e.g. company title and residential flats.|
|Parcel of vacant land||Zoned or otherwise designated for use for residential or principally for residential purposes.|
Residential land does not include land used for primary production that is exempt from land tax.
The surcharge applies if a building has both residential and commercial purposes. In this case, an apportionment factor is used to apportion the land value.
If you have any queries regarding this information, please contact our office on 02 4969 4699.