Land Tax in NSW

What is land tax?

Land tax is an annual tax payable on the taxable value of land you own in NSW, assessed as at 31 December each year. It is different from council rates and is usually relevant for investment properties, multiple property holdings, and other non-exempt land.

What land is usually exempt?

Most owners won’t pay land tax on their home because the ‘principal place of residence’ exemption applies. Certain primary production and other special categories may also be exempt.

When might land tax apply?

You may need to think about land tax, and whether you might be liable, if you:

• own investment property (including residential or commercial) or a holiday home;

• own vacant land or land held for future development;

• own land through certain structures (for example, a trust) where different rules can apply;

• have multiple properties, because the taxable value may be aggregated depending upon which entity owns what.

How is it calculated?

In simple terms, Revenue NSW assesses land tax based on:

• the unimproved land value (not the building or market value) of a property, generally using an average of NSW Valuer General land values;

• whether the total taxable value is above the relevant threshold for the given year (thresholds can change from year to year). For example, the 2026 land tax general threshold is $1,075,000 and the 2026 land tax premium threshold is $6,571,000.

Common pitfalls to watch for

• Assuming your property is exempt because it’s “mostly” your home (eligibility matters!);

• Not realising ownership structures (particularly trusts like discretionary trust) can affect whether the threshold will apply;

• Purchasing a property late in the calendar year and being surprised by the next assessment;

• Not updating details with Revenue NSW after a change in use (e.g. moving out and renting);

• Selling your property part way through a calendar year and not realising that Revenue NSW does not offer rebates or refunds in that instance. Any adjustment for land tax must be dealt with in the contract for sale between you and the purchaser.

 

Need advice?

If you’re buying, selling, changing how you use a property, or holding property through a trust or company, it’s worth getting tailored advice.

If you’d like to discuss your situation or looking to sell or purchase a property which is or may be subject to land tax, we welcome you to contact us.

This is general information only and does not constitute legal advice. Advice should be sought on your specific circumstances. Information is relevant as at the date of publication.