What is Land Tax?
In New South Wales, land tax is an annual state tax on the unimproved value of land you own, not on the value of the buildings or improvements on it. It’s mainly relevant to investors, owners of vacant land, commercial property owners, and some holiday-home owners.
Generally, you pay land tax if the combined taxable land value of your NSW properties exceeds the threshold. For 2025 and 2026, the general threshold is $1,075,000.
How can I avoid it?
Common exemptions include:
- Your main home (principal place of residence)
- Land used for primary production (farming)
How is it calculated?
For land values between $1,075,000 and $6,571,000, the current rate is:
$100 + 1.6% of the land value above $1,075,000.
Example;
Suppose you own an investment property and the taxable land value assessed for land tax purposes is $1,200,000.
- Taxable amount above threshold: $1,200,000 − $1,075,000 = $125,000
- Land tax: $100 + (1.6% × $125,000)
- Land tax: $100 + $2,000 = $2,100 per year.
Key Take aways;
- Land tax is based on the land value, not the property’s market value.
- NSW uses a 3-year average of land values to determine liability.
- Liability is determined by what taxable land you own at midnight on 31 December each year.
- The threshold applies to the combined value of all taxable land you own in NSW, not each property separately.
This article was published on 09/07/26 and the information is valid as at the date of publishing. This article is general in nature and is not and should not be considered or relied on as legal advice. Meehans Solicitors is not responsible in the event this information is relied upon by the reader in the absence of specific legal advice.
