Land Tax Build to Rent
The NSW Government is introducing a land tax discount for new build-to-rent housing projects until 2040 and a new Housing Diversity SEPP to provide more housing options, greater surety for renters, boost construction and support jobs during the COVID-19 recovery.
Consultation on proposed changes to property tax ended in March 2021. The feedback has been reviewed and a report that provides a progress update is now available on the NSW government website. The NSW Government wants to thank all who contributed to shaping the future of the NSW property tax system.
Land tax is an annual tax levied at the end of the calendar year on property you own that is above the land tax threshold. Your principal place of residence is exempt, and other exemptions and concessions may apply.
Find out more about:
You may have to pay land tax if you own, or jointly own:
Land tax applies regardless of whether income is earned from the land.
Generally, you do not pay land tax on:
Read more about land tax exemptions and concessions.
You must register for land tax if the value of all your taxable land is above the land tax threshold, even if you have not received a notice of assessment. If you don’t have a Client ID and Correspondence ID, please complete this form.
Once you have completed the form, you will receive a Client ID and Correspondence ID within two business days, and then you can register online.
If you are registering as a company or trust, call us on 1300 139 816.
If you are liable for land tax but do not register, or fail to lodge a return, we may charge you interest and apply penalties under the Taxation Administration Act 1996.
Land tax is calculated on the total value of all your taxable land above the land tax threshold, not on each individual property. If the combined value of your land does not exceed the threshold, no land tax is payable. Your liability for each year is based on the value of all land you owned on 31 December in the previous year. Any changes to the land you own this year will only affect how much you pay next year.
If the ownership and/or use of any of your land changes, notify us on land tax online.
The thresholds for land values change each year and are applied as follows:
|Tax year||General threshold||Premium threshold|
You are assessed based on the total land value of all your interests in land, whether you own them as an individual or as a joint owner.
For example, if you have a 50 per cent interest in jointly owned land, your individual tax assessment will include 50 per cent of that land plus 100 per cent of any land you own individually.
You will receive separate assessment notices for any jointly owned land.
If you own land with one or more other owners, you are considered a joint owner of land. Under the legislation, we are required to assess jointly owned land as if it were owned by one person. The partnership receives the benefit of the one threshold.
As a joint owner, you will be assessed as follows:
Where tax is paid by the joint owners, each joint owner is entitled to a secondary deduction in their separate assessments to avoid double taxation.
Every year, the Valuer General determines the value of all land in NSW at 1 July each year.
Land value is the unimproved value of your land.
The taxable value of each parcel of land is determined on the average value from the current year and the two past years, where applicable.
When a parcel of land has been created less than three years ago – for example, through a subdivision or amalgamation – we only consider the years after it was created.
|Year||Your land value|
($830,000 + $910,000 + $930,000) / 3
Your average land value for land tax purposes in 2021 is $890,000.
Find out more about the method for valuing land.
You are considered a landowner and may have to pay land tax if you are:
Chris is a 50% joint owner of Property A and the sole owner of Property B.
Average Land Values
Property A - $1,000,000
Property B - $450,000
A joint assessment applies to Property A
Calculation: ($1,000,000 - $822,000) x 1.6% + $100 = $2,948
An individual assessment applies to Chris' 50% share of Property A and to the total value of Property B combined.
Calculation: ($950,000 - $822,000) x 1.6% + $100 = $2,148
|Calculation 1: joint ownership assessment|
Interest of an individual in joint ownership / total land value of joint ownership x tax on joint ownership
$500,000 / $1,000,000 x $2,948 = $1,474
|Calculation 2: individual assessment|
Interest of an individual in joint ownership / total land value of individual x tax on individual
$500,000 /$950,000 x $2,148 = $1,130.53
Note: The allowable deduction is the lesser of the two calculations
Chris has an allowable deduction of $1,130.53
This amount is deducted from the total amount of land tax assessed in the individual assessment.
The total individual land tax payable is $2,148 - $1,130.53 = $1,017.47
Note: Chris also has a responsibility to ensure the joint ownership land tax payable of $2,948 is finalised. The percentage Chris pays should be decided amongst all joint owners.
Watch our video on joint ownership and secondary deductions.
A company is assessed in the same way as an individual, unless it is related to another company.
A company is related if:
When assessing related companies, the concessional company receives the benefit of the threshold and each other company (non-concessional) is assessed without the threshold.
Where the concessional or joint concessional companies’ land value exceeds the premium rate threshold, the land value of each non-concessional company is assessed at 2 per cent of the taxable value.
Where the land value does not exceed the premium rate threshold, but exceeds the general threshold, the land value of each non-concessional company is assessed at 1.6 per cent of the taxable value.
A trust is an arrangement where a trustee manages, or holds a property for the benefit of one or more individuals or organisations (known as a beneficiary). The trustees have a duty to the beneficiaries, who are the ‘beneficial’ owners of the trust property.
For information on how trusts are assessed for land tax refer Trust page.
If you are liable for land tax, you will receive an annual assessment notice that will include a list of all NSW land you owned on 31 December the previous year and how much land tax you must pay.
If you do not receive an assessment notice, please contact us to find out if you are liable for land tax.
Check that the following details on your assessment notice are correct:
If your details are incorrect, update them online before the first instalment date or, if it’s a ‘nil’ assessment, within 40 days of the date shown on the assessment notice.
Common errors for land tax include:
You should only receive one assessment notice each year. If you receive more than one notice, please complete the online form and we will correct your records.
You will receive a joint assessment notice, as well as your individual notice. Each unique combination of owners is considered a different joint ownership.
The land you own will appear on both your joint and individual assessment notices, and a deduction will be applied to your individual assessment.
Each member of a joint ownership is considered individually.
If you believe we have applied the legislation incorrectly to your assessment, you have the right to lodge a formal objection. Your objection must be lodged within 60 days of the assessment or decision being made.
If you have additional information that we haven’t previously considered, including applying for an exemption, you should lodge a variation return rather than an objection. You should do this through Land Tax Online, on or before the first due date of your notice of assessment.
Please note: even if you’ve lodged an objection, you must still pay by the due date as interest will be imposed on any overdue amounts, and a refund will be issued to you if your objection is successful.
If you are dissatisfied with the result of your objection, you can request an external independent review.
If you disagree with your land value shown on your assessment you can go to valuergeneral.nsw.gov.au for more information about land values and the review process. You have 60 days from the issue date on your land tax assessment notice to lodge an objection to the land value.
We offer a range of payment plans and payment options to pay your land tax. Find out more.
If you are selling your property under contract, you must apply for a clearance certificate and give the buyer a copy at least 14 days before the contract completion date. For contracts completing within 14 days, the buyer must be given a copy on the completion date. A clearance certificate is issued under Section 47 of the Land Tax Management Act 1956 and provides the current land tax liability status for a selected property.
The clearance certificate must be:
The property is ‘clear’ if:
The certificate doesn’t have to be ‘clear’ when given to the buyer.
If you own three lots in one strata plan, they’ll be processed under one certificate. If more than three lots are involved, you’ll need to lodge more than one certificate.
The seller should provide you with a clearance certificate as part of the contract for sale. A clearance certificate provides the current land tax liability status for a selected property. A clearance certificate showing that there is no land tax charged on the land protects a purchaser from any outstanding land tax liability by a previous owner. It does not provide any protection to the owner of the land.
If the seller does not contact you to provide you with a clearance certificate, you can apply for this certificate as the purchaser. We do recommend you do this to ensure the previous owner has paid all outstanding land tax.
A mortgagee can apply for a clearance certificate for land they intend to finance.
To apply for a clearance certificate, you need to have an account with one of these service providers:
You can pay land tax by BPAY during settlement, via an approved ELNO.
To clear the land tax on or before settlement, you’ll need one of the following documents:
The land item must appear on the assessment as 100 per cent owned. It must match the land item on the clearance certificate. Only use this method if settlement is taking place on or before the first due date on the assessment notice. Full payment is required for the land tax to be cleared.
If an assessment notice can't be issued, a clearance quote will be issued in its place so that settlement can proceed.
The land item shown on the clearance quote must match the land item on the clearance certificate. The total amount must be paid by the due date on the clearance quote.
If you have an assessment notice and its due date has passed, email email@example.com to get a settlement letter or call 1300 368 710. Please allow 10 business days for this to be processed.
The land item shown on the settlement letter must match the land item on the clearance certificate. The total amount must be paid by the due date on the settlement letter.
If paying before settlement, pay the full amount shown on the relevant document before its due date and before settlement. Retain a copy of the receipt as proof of payment.
You can request an updated or existing certificate online. You will need your enquiry ID and correspondence ID from your clearance certificate application.