Land Tax NSW — Rates, Thresholds and Exemptions (2026)
NSW land tax is an annual tax levied by Revenue NSW on the unimproved land value of taxable properties. Your principal place of residence is exempt — land tax only applies to investment properties, holiday homes and land not used as a principal residence. NSW land tax thresholds are indexed annually, making it one of the better-calibrated systems in Australia.
NSW Land Tax Threshold (2026)
The NSW land tax threshold is indexed annually based on property market movements.
2026 general threshold: Approximately $1,075,000 (verify current year threshold with Revenue NSW — the exact amount is confirmed by Revenue NSW each year).
Properties where your aggregated land value falls below the threshold: no land tax payable.
NSW Land Tax Rates (2026)
| Aggregated Land Value | Land Tax |
|---|---|
| Below threshold (~$1,075,000) | Nil |
| Threshold to $6,571,000 | $100 + 1.6% of the taxable value above the threshold |
| Over $6,571,000 | $87,236 + 2.0% of the amount over $6,571,000 |
Example — $1,400,000 land value (single investment property):
- Taxable land = $1,400,000 − $1,075,000 = $325,000
- Land tax = $100 + 1.6% × $325,000 = $100 + $5,200 = $5,300 per year
What “Aggregated Land Value” Means in NSW
NSW land tax is assessed on your total taxable land holdings — not per property.
If you own:
- Investment property 1: land value $700,000
- Investment property 2: land value $500,000
- Total: $1,200,000 — land tax applies on the excess above $1,075,000
This aggregation makes NSW land tax apply earlier to multi-property investors than those who look only at a single property’s land value.
NSW Land Tax Assessment — How It Works
Revenue NSW assesses land tax as at 31 December each year. If you own a taxable property on 31 December, you receive a land tax assessment for that calendar year.
- Revenue NSW obtains land values from the NSW Valuer General (updated annually)
- Revenue NSW aggregates all your taxable NSW land holdings
- If aggregate value exceeds the threshold, a land tax notice is issued in January/February
- Land tax is payable in instalments (typically two instalments)
Principal Place of Residence — NSW Land Tax Exemption
Your principal place of residence (the home you live in) is exempt from NSW land tax.
Conditions for the principal residence exemption:
- You must be an individual (not a company or trust)
- The property must be your principal place of residence — not a holiday home or investment property
- You can only have one principal place of residence at a time
Temporary absences: If you are temporarily absent (e.g., overseas for 1–2 years), you may still be entitled to the exemption if you intend to return. Rules around duration and evidence of intention apply — Revenue NSW assesses these on a case-by-case basis.
Other NSW Land Tax Exemptions
| Exemption Category | Conditions |
|---|---|
| Primary production land | Must be used for farming/primary production, not just rural zoning |
| Charitable organisations | Specific criteria apply |
| Retirement village operators | Land used for retirement village purposes |
| Deceased estates | Exemption may apply for a period after death |
| Strata common property | Exempt |
NSW Surcharge Land Tax — Foreign Persons
Foreign individuals and certain foreign-controlled entities owning NSW residential land pay an additional surcharge land tax:
- Rate: 4% per year of the total land value (no threshold applies to the surcharge)
This is in addition to the standard land tax rate.
Example: Foreign person, NSW residential land value $800,000:
- Standard land tax: $0 (below general threshold)
- Surcharge land tax: 4% × $800,000 = $32,000 per year
Foreign persons should carefully factor surcharge land tax into the economics of NSW investment property. This is a significant ongoing cost.
NSW Land Tax on Land Held in Trusts
Land held in trust in NSW is subject to special land tax treatment:
- Trusts: A different (lower) threshold applies — $25,000 tax-free threshold
- Trust land tax is calculated at a flat rate above this lower threshold
- The beneficiary or trustee may be treated as the owner
Trust land tax is a specialised area — legal and tax advice is recommended for trust-held property.
NSW Land Tax — Investment Property Holding Cost Example
| Land Value | Annual NSW Land Tax |
|---|---|
| $1,000,000 | Nil (below threshold) |
| $1,200,000 | ~$2,100 |
| $1,500,000 | ~$6,900 |
| $2,000,000 | ~$14,900 |
| $3,000,000 | ~$30,900 |
These amounts assume a single investor with no other NSW taxable land. Multiple properties are aggregated.
Is NSW Land Tax Deductible?
Yes — land tax paid on investment properties is a deductible expense for Australian income tax purposes.
You claim the deduction in the income year in which it is paid (not assessed). The ATO requires that the land tax relates to property that is producing or is available to produce rental income.
Consult a registered tax agent for advice on your specific situation.
Frequently Asked Questions
What is the NSW land tax threshold for 2026? Approximately $1,075,000 (indexed annually). Revenue NSW confirms the exact threshold each year — check revenue.nsw.gov.au.
Do I pay land tax on my home in NSW? No — your principal place of residence is exempt from NSW land tax. Land tax only applies to investment properties, holiday homes and other land not used as your principal residence.
When is NSW land tax assessed? Land tax is assessed as at 31 December each year. If you own a taxable property on 31 December, you will receive a land tax notice for that year.
Is NSW land tax going up? The threshold is indexed annually, which moderates the impact of rising land values. However, significant increases in land values (as seen in Sydney) mean more investors cross the threshold over time.
Related Guides
This article provides general information about NSW land tax. Rates, thresholds and exemptions are set by Revenue NSW and change annually. Always verify with Revenue NSW (revenue.nsw.gov.au). Land tax may have income tax implications — consult a registered tax agent. For advice tailored to your situation, speak with a licensed financial adviser. Find one through MoneySmart.