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NSW Land Tax - Your Questions our Answers

1. Who is considered to be a land owner for land tax purposes?

An owner includes a sole owner, joint owners, a company, a trustee of a trust, a beneficiary of a trust, a shareholder in a home unit company and /or any person deemed to be an owner by the land tax legislation including a person who leases land from the Crown or from a Local Council

2. What if I own property in NSW with some one else?

In most cases the OSR will issue land tax assessments to each owner in their respective proportions. The ownership proportion is shown on the land tax assessment.

3. How is land tax calculated?

Ownership is based on ownership as at midnight on 31 December in any year.

4. What is the amount of land tax payable?

Land tax rates and land tax thresholds are determined each year by the OSR. Please contact us for details in respect of any particular year.

5. How does the threshold work if I own several land items?

If you own or have interests in more than one property then the value of all your liable land will be added together. You will then be charged land tax on the combined land value above the land tax threshold.

Each taxpayer is only entitled to the benefit of one threshold.

6. When is NSW land exempt from land tax?

There are certain statutory exemptions. For instance if your property is your principle place of residence and is not owned by a company or trust, it will be exempt from land tax.

Other statutory exemptions include:

  • land used and occupied primarily for boarding houses

  • land used for low-cost accommodation within a five kilometre radius of the City of Sydney

  • retirement villages, aged-care establishments and nursing homes

  • religious and charitable institutions

  • some other non profit organisations

7. What other allowances are available?

Allowances relating to heritage and other affectations could apply. These are usually noted on your land tax assessment. If not, a separate application should be made to the OSR. Please contact us and we can elaborate.

8. What if my property does not earn income in any land tax year?

The property will be subject to land tax even if it is not income producing (eg a holiday home, a hobby farm or vacant land).

9. What if I buy another property during the year?

You are required to notify the OSR accordingly. A land tax return should be filed by you or your tax agent.

The Valuer General is usually notified automatically on registration of the transfer of the property into the name of the purchaser.

10. What if I sell my property during the year?

The land tax assessment is based on land ownership as at midnight on 31 December each year. If you own property at that time then you are liable for the duty as assessed for the entire year, this is even if you only held the property for 1 day.

If you sell your property during the year then you need to notify the OSR accordingly.

As between the buyer and the seller, it is possible to agree with the buyer that land tax be apportioned as at the date of settlement of the sale of the property, but this is something that should be expressly negotiated with the buyer at the time of sale.

You are not entitled to a refund if you sell your property during the year.

11. What if I buy a new home but continue to live in my old home while I am renovating?

You may be entitled to a land tax exemption (on both properties) in certain circumstances - as long as one residence is or was your principal place of residence and the newly purchased residence is or will be your principal place of residence.

12. When do I need to pay my land tax?

You need to pay your land tax by the first instalment date shown on your land tax notice of assessment.

If you pay your land tax in full by this date, you will be eligible for a 1.5% discount on your land tax.

Interest and other penalties apply for late payment.

13. How do I pay my land tax?

The payment options are specified in the land tax assessment.

14. Can I apply for an extension of time to pay my land tax?

The Commissioner may extend the time for payment in certain circumstances.

For substantial debt amounts you may have to complete and return an Application for a Payment Arrangement.

15. Can I defer my land tax liability?

This is possible only in cases of financial hardship.

Seniors are not automatically entitled to an exemption or deferral.

A special application must be made to the Department of Lands in such circumstances. We can assist if you think this may apply to you.

16. What special concessional arrangements apply to deceased estates?

If a property was the deceased's principal place of residence it will be exempt from land tax for 12 months after the date of death, or until the land is transferred to any person (other than the deceased person's personal representative or a beneficiary of the deceased person's estate) - whichever occurs first.

If the deceased's principal place of residence is still used and occupied as the principal place of residence by a person living in the residence who was given a right to occupy by the will of the owner (for instance by virtue of a life interest in the property) or a person (other than a tenant) who lived with the owner immediately before their death and who continues to live in the residence with the permission of the deceased person's personal representative (usually the executor of the estate) then that person is considered to be the "owner" of the land for land tax purposes and land tax is not payable - but only while the person continues to use and occupy the land for non income producing purposes.

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