Whether you’re a property owner, investor, or simply curious about the distinction of land tax in NSW, this guide aims to provide you with a detailled overview of what land tax is, what exemptions are available and key actions to keep in mind

What is Land Tax?

Land tax is a tax paid to the State Government by owners of land. It is levied at the end of the calendar year on any property you own that is above the land tax threshold. Your principal place of residence is exempt from this and there are also other exemptions and concessions.

Who Pays Land Tax?

In NSW, land tax is applied to those who own property with a total taxable value above the applied threshold. Income generated from the land is irrelevant when applying Land Tax. If you own, or jointly own the below you may be liable to pay the tax:

• Vacant land, including 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 warehouse
• Land leased from state or local government

Who is Exempt from Paying Land Tax?

Not all land owners are required to pay Land Tax. Some exemptions include the below:

• Your permanent place of residence, your home (you can only claim this exemption for one property). A principal place of residence exemption will only be available to a person occupying the property as their principal place of residence who owns an interest of at least 25% in the property
• Land owned which falls under the land tax threshold
• Land that falls under ‘other’ exemptions category

How is Land Tax Calculated?

There are two thresholds when calculating for Land Tax. For 2024 the thresholds are:

Basic Land Tax Calculation

• $1,075,000 threshold
• 1.6% land tax rate

Premium Land Tax Calculation

• $6,571,000 threshold
• 2.0% land tax rate

The Land Tax is based on the combined value of all taxable land you own. A percentage of tax is paid over each threshold, plus a base tax of $100

How is your Land Valued?

Each year, the Valuer General determines the value of all land in NSW. The land value is the unimproved value of your land.

On 1 July for the upcoming land tax year, values are determined based on the average value from the current year and past two years.