Land Tax Australia: Rates, Thresholds and Exemptions by State
Land tax is an annual tax on the total unimproved value of land you own in a state or territory, excluding your principal place of residence. It applies in every state except the Northern Territory and is one of the significant recurring costs for property investors that is often overlooked when first buying.
How Land Tax Works
Each state sets its own land tax rules, including the threshold above which land tax applies, the rates charged, and who is exempt. The tax is levied on the unimproved capital value (UCV) or site value — the value of the land without any buildings or improvements.
The threshold and rates are assessed separately in each state. If you own property in multiple states, each state assesses only the land you hold within its borders — there is no national aggregation.
State-by-State Summary (2025–26)
New South Wales
- Threshold: $1,075,000 (2025 tax year)
- Rate: 1.6% above the threshold, plus a $100 flat amount
- Surcharge: Foreign investors pay an additional 4% surcharge on all NSW taxable land
Victoria
- Threshold: $300,000 (lower than most states)
- Rate: 0.2% to 2.55% depending on total landholding value
- Surcharge: Foreign investors pay an additional 2% surcharge
Queensland
- Threshold: $600,000
- Rate: 0.5% to 2.75%
- Note: QLD aggregates land owned by the same individual across the state
South Australia
- Threshold: $723,000 (2025)
- Rate: 0.5% to 2.4%
Western Australia
- Threshold: $300,000
- Rate: 0.1% to 2.67%
Tasmania
- Threshold: $99,999
- Rate: 0.45% to 1.5%
ACT
- ACT does not have a traditional land tax. It levies rates annually on all properties, including investments.
Principal Place of Residence Exemption
Your home is exempt from land tax in all states. You must own and occupy the property as your principal place of residence on the relevant date (usually 31 December or 31 October, depending on the state). You can only nominate one property as your principal place of residence.
If you move out of your home and rent it, you typically lose the exemption from the following tax year.
Temporary Absences
Some states allow a short-term exemption if you temporarily vacate your principal place of residence — for example, due to work relocation or overseas assignment. The maximum period and conditions vary by state.
Trusts, Companies, and Joint Ownership
Land held by trusts and companies is often assessed at the top marginal rate with no threshold. Some states also have surcharges for discretionary trusts. The rules are complex and vary significantly — get professional advice if you hold investment property in a structure.
For jointly owned property, most states attribute each owner's proportional share of land value when assessing their total landholdings.
Minimising Land Tax
Strategies used by experienced investors include:
- Holding property across multiple states — each state has a separate threshold
- Keeping landholdings below the threshold in each state (though yields and growth must justify location choices)
- Reviewing your property valuation — if the assessed site value is incorrect, you can object
Avoid using trust structures purely for land tax advantages without proper advice — the rules are complex and can backfire.
Record-Keeping
Land tax notices are issued by the relevant state revenue authority. You must ensure the authority has your current address, especially if you are overseas. Unpaid land tax becomes a first-ranking charge on the land — it can affect your ability to sell or refinance.
Use the Investment Property Calculator to factor land tax into your annual holding costs and net cash flow estimate.