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In NSW land tax and surcharge land tax are based on unimproved land values. Learn how Revenue NSW uses thresholds and rates to calculate how much you will pay.
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Land values used to calculate tax
Revenue NSW uses unimproved land values provided by the NSW Valuer General as of 1 July each year.
Unimproved value means the value of the land itself, excluding buildings or other improvements.
Revenue NSW then uses a 3-year average of the land values to calculate how much land tax or surcharge land tax is owed by each landowner in the state. See example below.
If a parcel of land was created less than 3 years ago, such as through a subdivision or amalgamation, we only consider the years after it was created.
Your average land value for land tax purposes in the 2025 tax year is ($1,050,000 + $1,100,000 + $1,150,000) ÷ 3 = $1,100,000.
When comparing the above average land value against the current land tax threshold, we would calculate your liability as follows:
$1,100,000 (average land value) - $1,075,000 (general threshold) = $25,000 (taxable land value).
$25,000 x 1.6% + $100 (general land tax rate) = $500 total land tax liability.
Taxing date for calculations
Revenue NSW calculates land tax and surcharge land tax on the land value of all taxable land owned at midnight on 31 December each year. This is called the taxing date.
Tax is charged for the full year following the taxing date.
Land tax calculations are not pro rata. This means your tax is not reduced if you own taxable property for only part of the year. For example, if you sell your taxable property in February, you must still pay tax for the full year.
Any changes to the land you own in the current year will only affect how much tax you pay next year.
If the ownership or use of any of your land changes, update your land tax details (lodge a return) in Land Tax Online.
What is taxable land?
Revenue NSW only uses taxable land to calculate your land tax liability.
Land is considered taxable unless it qualifies for an exemption or concession. Common exemptions include:
The land tax threshold is a set property value amount. When the value of all the taxable land you own is above the threshold, you become liable for land tax.
When the combined land value of all your taxable property in New South Wales (NSW) is:
below the general threshold, you do not pay land tax, or
above the general threshold, you pay land tax on the land value above the threshold.
The threshold is not applied to the land value of each property individually, but to the combined value of all property you own.
It does not matter if you earn income from your land or not.
Land tax rates are the formulas used to determine the amount of land tax you pay.
For the general threshold, the current land tax rate is $100 plus 1.6% of the land value above $1,075,000.
There is also a premium threshold rate for land that is value over $6,571,000.
Some ownership types are not eligible to receive the land tax threshold. This means some owners may pay land tax even if their land value is below the $1,0750,000 threshold.
The tax-free threshold does not apply to land owned as part of special or discretionary trusts. Read how trusts are assessed for land tax for more details.
Surcharge land tax for foreign persons
If you are a foreign person who owns residential land in NSW, you must pay surcharge land tax unless you are eligible for an exemption.
There is no tax-free threshold for surcharge land tax. This means foreign persons must pay surcharge land tax regardless of the land value of their non-exempt residential properties.
The surcharge land tax rate is 5% of the value of your property. It is calculated:
General threshold example for an individual landowner
On 31 December 2024 Joan owns the following properties in NSW that are not eligible for a land tax exemption:
Property A: A house in Dubbo that she rents out. The average land value over 3 years is $525,000.
Property B: A house in Dorrigo that she rents out. The average land value over 3 years is $430,000.
Property C: A holiday home in Kiama. The average land value over 3 years is $700,000.
The combined land value of the 3 properties owned by Joan is $1,655,000 (Property A + Property B + Property C) which is more than the general land tax threshold of $1,075,000.
Joan will pay tax on the total value over the threshold, which is $580,000 ($1,655,000 - $1,075,000).
The land tax rate of 1.6% is applied plus $100.
For 2025 Joan will pay $9,380 [($580,000 x 1.6%) + $100].
Premium threshold example for an individual landowner
This example looks at how Revenue NSW assesses land tax for Chris, who individually owns two properties.
Since the combined land value of his properties exceeds the premium threshold, we apply the premium rate to determine his land tax liability.
Landowner
Chris
Property ownership
Property D Chris owns 100% Average land value over 3 years = $3,500,000
Property E Chris owns 100% Average land value over 3 years = $3,500,000
Calculation
$88,036 (maximum general land tax payable) + [$7,000,000 (total land value) - $6,571,000 (premium land tax threshold)] x 2% (premium land tax rate) = $96,616
