Land tax is applicable to all states in Australia with the exception of the Northern Territory. A complicated area and one that has rules differing between states. For this reason this article just addresses NSW.
What is land tax?
Information on NSW Land Tax available from: www.osr.nsw.gov.au/taxes/land.
Land tax is a tax levied on the owners of land in NSW as at midnight on 31 December of each year. In general, your principal place of residence (your home) or land used for primary production (a farm) is exempt from land tax.
You may be liable for land tax if you own or part-own:
vacant land, including vacant rural land
a holiday home
company title units, or
residential, commercial or industrial units
Run a business from your home.
When we refer to an owner we mean the following:
a sole owner
owners of company title units
a trustee of any trust
a beneficiary of a trust which is not a special trust
a society or organisation whose land is not exempt
unit holders with interest in a unit trust which is entitled to the land tax threshold
trustees of superannuation funds
certain lessees of crown or local council land.
The Valuer General values all land in NSW annually and provides these values to Revenue NSW for land tax purposes.
Values are determined as at 1 July, preceding each land tax year, for example the 2017
value is used for the 2018 tax year.
What are the Land tax rates and thresholds ?
Accessing land values
Land values can be accessed from the valuer generals website.
Land Tax Rate & Thresholds
See the Office of State Revenue website
Land tax is calculated on the total value of all your taxable land above the land tax
threshold. For 2019 the threshold is $692,000.
The amount of tax paid is $100 and 1.6 per cent of the land value between the threshold and the premium rate threshold of $4,231,000, and 2 per cent thereafter.
Where land is owned in partnership, regardless of the number of partners, the threshold is still $692,000.
An individual’s interest in a partnership may also be assessed if that owner holds other
land individually or with other partnerships.
If the combined value of your land does not exceed the threshold, no land tax is payable.
Basic land tax calculation
Use the following formula to calculate basic land tax:
(A minus B) multiplied by C plus D = Land tax payable.
A is the total land value = $680,000
B is the land tax threshold for 2018 = $629,000
C is the land tax rate = 1.6%
D is the standard tax = $100
($680,000 minus $629,000) x 1.6 % + $100 = $916
Premium land tax calculation
Use the following formula to calculate premium land tax:
(A minus B) multiplied by C plus D = Total premium land tax payable.
A is the total land value = $4,423,000
B is the premium land tax threshold for 2018 = $3,846,000
C is the land tax rate = 2%
D is the basic land tax payable = $51,572
($4,423,000 - $3,846,000) x 2% + $51,572 = $63,112
What Are the Types of Properties that Are Taxed?
All types of non-exempt properties, including rental homes, holiday homes, vacant land, retail shops, commercial spaces, and investment properties are liable for land tax.
Homeowners have to notify the authorities in writing within 30 days if they start renting out their primary place of residence. As a general rule, all non-exempt properties are liable for land tax whether they’re income producing or not.
Read more about land tax exemptions.
How is the value of my land determined?
For 2007 and subsequent tax years, the value used to determine your land tax liability
will generally be the average of the land value for the current tax year and the
land values for the previous two years.
Where a parcel of land was only recently created (e.g. by subdivision or amalgamation)
the average value will be based only on the land values for those taxing dates when
the newly created land item existed.
Strata unit valuations
For strata units, the land value for each individual strata lot is calculated on a proportional basis, using the unit entitlement for each lot and the aggregate for the strata scheme.
More information on land values
Landowners can find out more about land valuations at the Valuer General and see an
overview of land values in your local government area.
What if I disagree with the valuation of my land?
Revenue NSW does not make or oversea land valuations. If you disagree with the
valuation of your land, you may object to the Valuer General within 60 days
of receiving your notice of assessment.
For more information, visit the Valuer General website.
Note: if you are objecting to your land valuation, you will still need to pay your land tax
or you may be charged interest on any outstanding liability
Who Is Exempt from Paying Land Tax?
If you use or occupy any piece of land as your primary residence (home), you’re exempt from paying land tax for that property. The same exemption applies to primary production land or land which is used towards market gardening, orcharding, cereal cropping, hydroponics, bee keeping, dairying, pig-farming, and more. To see the entire list of businesses or industries that are included, view the Primary Production Land Exemption application form. Child care centres, nursing homes, non-profit organisations, and boarding houses are also entitled to full or partial exemptions.
How do i object to a land tax assessment if i disagree?
You have the right to lodge an objection when you are dissatisfied with a tax assessment or certain decisions of the Chief Commissioner of State Revenue.
Your objection must be lodged within 60 days of service of notice of your assessment or notification of a decision of the Chief Commissioner.
For complete details see the objection check list on the OSR website.
How Soon Do You Need to Pay Land Tax?
You have to pay it by the first instalment date mentioned on your land tax notice. If you pay the amount in full, you can even get a 1.5% discount on the total amount.
Land Tax can be a challenging area to manage on your own, our office has extensive experience in dealing with all state revenue offices. If you are unsure of your land tax assessment or would help objecting to an assessment contact us on (02) 8005 0380 or email@example.com.