Land Tax

Who needs to pay?

If you own, or jointly own, any property in NSW that is not your principal place of residence (your home) or other exempt land as at midnight on 31 December and the total taxable value of your land is greater than the land tax threshold, you may be liable to pay land tax.

For land tax, an owner is defined as any of the following:

  • sole owner
  • joint owners
  • a company
  • owners of company title units
  • trustee of any trust
  • beneficiary of a trust which is not a special trust
  • 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.

 

What land is exempt?

  • Principal place of residence
  • Concession for land intended as your principal place of residence

 

Concession for change to principal place of residence

If you have purchased a house that you have moved into or intend to move into, or vacant land you intend to build on, but still owned your former home at the taxing date you may be able to claim an exemption for both properties.  Other exemptions include: land that is zoned rural or non-urban and used for a business of primary production, land used and occupied primarily for boarding houses anywhere in NSW, retirement villages and religious and charitable institutions.

 

Rates and Thresholds

Table - Land Tax

 

Land and Strata unit valuations

The Valuer General values all land in NSW annually and provides these values to us for land tax purposes.  For strata units, the land value for each individual strata lot is calculated on a proportional basis using the unit entitlements for each lot and the aggregate for the strata scheme.

Read more about land valuations at:

http://www.valuergeneral.nsw.gov.au/

 

What should I do if land is owned by a trust?

If your liability to land tax is affected by the existence of a trust, you must advise the Office of State Revenue and complete a land tax registration.

If you believe the trust is entitled to receive the benefit of the land tax threshold (i.e. the trust is not a special trust), you will need to supply a copy of the stamped deed of trust or probate of a will and the beneficiary details.

 

How is a trust defined for land tax purposes?

Tax Rates Apply Tax Don’t Rates Apply
●       Fixed trusts

●       Superannuation trusts

●       Trusts created by a will

●       Concessional trusts

●       Charitable trusts

 

●       Special trusts

How are unit trusts assessed?

A unit trust may be a special trust, a fixed or a family unit trust.  To be a fixed trust, certain criteria apply.  If these criteria do not apply, the trustee may restructure the trust deed to meet the criteria but the threshold will only apply from the next tax year.

 

If the trust does receive the benefit of the land tax threshold, how does it affect the beneficiaries or unit holders as secondary taxpayers?

If a beneficiary or a unit holder owns other taxable land, or is a special trust, they are assessed on the combined value of their interest of the land held in the trust and any other taxable land owned.  They may be entitled to a secondary deduction to prevent double taxation.


[1]”Land tax | Office of State Revenue”, Osr.nsw.gov.au, 2017. [Online]. Available: http://www.osr.nsw.gov.au/taxes/land. [Accessed: 12- Jan- 2017].

[2]Land Tax 2016, 1st ed. Sydney: Office of State Revenue, 2017, pp. 1-6.

[3]O. Wales, “Home – Valuer General of New South Wales”, Valuergeneral.nsw.gov.au, 2017. [Online]. Available: http://www.valuergeneral.nsw.gov.au/. [Accessed: 12- Jan- 2017].