24th March, 2025
Land tax is an important consideration for property owners in New South Wales (NSW). This annual tax applies to properties valued above a certain threshold. The following blog explains who is liable for land tax, how it is calculated, and when it must be paid.
What Is Land Tax?
Land tax is an annual tax imposed on properties whose value exceeds a specific threshold. The tax is based on the unimproved value of the land. Typically, your principal place of residence is exempt from land tax, and there are other exemptions and concessions that may apply. Notably, it is not dependent on the income generated from the property.
Who Pays Land Tax?
Property owners in NSW may be liable for land tax if they own any of the following types of property:
- Vacant land: Including rural land.
- Investment properties: Residential, commercial, or industrial properties.
- Holiday homes: Properties that are not your primary residence.
- Leased land: Land leased from the state or local government.
- Company title properties: Including commercial properties and company title units.
Land tax may also apply if:
- You are considered a foreign owner for land tax purposes.
- Your land value exceeds the threshold, even if you are classified as a not-included owner (which typically means you’re exempt from land tax, but not if the land value is too high or if you’re a foreign owner).
Land tax is applicable regardless of whether the land generates income.
How Is Land Tax Calculated?
Land tax is calculated based on the total taxable value of your land. If the total value exceeds the general land tax threshold, you will be taxed on the amount above that threshold. The rate at which it is charged varies depending on the value of the land and the ownership structure.
For example, the tax rate generally includes a base amount, with an additional percentage applied to the value above the threshold. In cases where the value exceeds a higher premium threshold, a higher rate of tax may apply.
When Is it Assessed?
Land tax is assessed annually, with the valuation date being 31 December of the previous year. Property owners will receive a notice of assessment from Revenue NSW, which outlines the land owned as of that date, along with the corresponding land tax liability. It is important to review this notice carefully to ensure the information is accurate.
The due date for payment will be listed on the notice of assessment. Timely payment is important to avoid penalties or interest charges for late payments.
Exemptions
Several exemptions may apply, including:
- Principal place of residence: Generally exempt from land tax.
- Primary production land: Land used for farming or agricultural purposes.
- Low-value land: Land that is below the taxable value threshold.
These exemptions can significantly reduce your land tax liability, depending on the nature and use of the acreage.
At Castrikum Adams Legal, we specialise in property law matters, property leases, and other related matters. Our team can provide guidance on your obligations and ensure that you follow all relevant legislation.
This article provides general information about land tax in NSW and does not constitute legal or tax advice. For specific advice regarding your circumstances, please consult a qualified professional.
For more information, visit the Land Tax | Revenue NSW website.
If you found this guide helpful, we invite you to check out our other blog posts.