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NSW Land Tax - Does it apply to you?

NSW Land Tax generally applies to those who individually or jointly own a property in NSW that is not their primary residence or is not specifically exempt. Despite this applying to many real estate owners, some investors may be unaware of land tax, which is frequently overlooked and misinterpreted.


Land Tax Assessment

Each year, the Land Tax applying to your NSW property is evaluated in December, with the Land Tax Assessment Notices arriving in January of the following year. This makes the end of each year a great moment to review the principles of land tax and the key actions you must take.

Land Tax Details

  1. The value of all land in NSW is determined at the 1st of July each year. To calculate the taxable value of each piece of land, the Valuer General will use the average value from the current year and the two prior years.
  2. NSW Land Tax is imposed on any NSW property you own at midnight on 31st December of each year and is calculated on the value of the unimproved land. This simply means the value of the land with no improvements including houses, fencing etc.
  3. Land owners must self-assess whether the value of all their taxable land is above the land tax threshold and register if applicable. Registration can be completed online via the Revenue NSW website. Land owners are exempt from Land Tax if the combined value of all taxable land is less than the threshold.
  4. Some properties may be exempt from Land Tax. Common exempt properties include your own residence and land used for primary production.
  5. Land Tax is payable regardless of whether the land is earning any income such as vacant land, vacation home or hobby farm.
  6. Land Tax is assessed whether the property is owned by you as an individual, in partnership, by a company or trust controlled by you, or by a superannuation fund.
  7. Majority of land owners only pay land tax on the value of the land over the Land Tax Threshold. The Land Tax Threshold applies to most land owners other than companies within larger groups and certain types of Trusts.

NSW Land Tax Threshold & Calculation

  1. The NSW Land Tax Threshold for 2022 is $822,000.
  2. In NSW, land tax is calculated as $100 + 1.6% of the land value over $822,000. For instance, a property with a $1,000,000 land value would be subject to $2,948 in land tax in 2022. A higher fee of $67,364 + 2% is charged on land valued over $5,026,000.
  3. Landowners may be considered foreign depending on factors such as their citizenship or where they have resided throughout the year. Foreign land owners are required to pay a Foreign Land Tax Surcharge at 2% of the taxable value of their land for 2022 and 4% from 2023 onwards.
  4. You must be aware of the limits and tax rates in each state in which you own property as Land Tax requirements vary between each state.
  5. For more information on NSW Land Tax, or to register online, visit Revenue NSW.
  6. For all the details on Land Tax, including Thresholds and Calculations in all Australian States take a look at our article here.

Review Your Land Tax Situation

If you are already registered, you can expect a Land Tax Assessment Notice in the mail at the start of the 2023 calendar year. You have until the first instalment date, which is most often the end of February, to notify the Office of State Revenue of any changes to the Assessment Notice, including the specifics of the land assessed.

You may submit an objection if you disagree with the land values that have been used as the basis of your assessment. An objection must be lodged within 60 days of the issue date of the assessment.

If you will be liable for land tax for the first time, you must submit your registration by 31 March of that year.

Our team at BLG Business Advisers are Wollongong Accountants who specialise in assisting property investors in all states of Australia. Please talk with us to discuss your property or land tax issues and make the process easier.

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*Please note that the above information is general advice only. We recommend you seek advice from a specialist relevant to your personal situation. This information is correct at the time of publishing and is subject to change*
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