Key takeaways:
Land tax rules vary by state and territory. Thresholds, exemptions and surcharges differ across Australia.
Your home is generally exempt. Most principal places of residence won't attract land tax if eligibility requirements are met.
Investment properties may attract annual land tax. Liability depends on your land value, ownership structure and where the property is located.
Land tax settings can change. Always check the latest thresholds, exemptions and surcharges before making property decisions.
Land tax is an ongoing holding cost. Budget for it alongside loan repayments, insurance, council rates and maintenance.
Buying an investment property involves more than the purchase price. Along with home loan repayments, insurance, council rates and maintenance, you may also need to budget for land tax, an ongoing cost that can affect the long-term cost of owning an investment property.
Land tax rules vary across Australia. Each state and territory sets its own thresholds, exemptions and rates, so whether you pay land tax (and how much) depends on where your property is located and your individual circumstances. For property investors with more than one property or properties in different states, these differences can add up.
In this guide, you'll learn:
How land tax works in Australia.
Who generally pays land tax and when it may apply.
How land tax is calculated.
How land tax rules, thresholds and exemptions differ across each state and territory.
What property investors should consider when budgeting for ongoing land tax costs.
What is land tax in Australia?
Land tax is an annual state or territory tax that may apply if you own investment property or other taxable land. Unlike stamp duty, which is generally paid when you buy a property, land tax is an ongoing holding cost that may apply for as long as you own eligible land.
There isn't a national land tax system. Each state and territory sets its own thresholds, exemptions, rates and assessment rules, so whether you pay land tax (and how much) depends on where your property is located and your individual circumstances.
Is land tax an ongoing property cost?
If your property is liable for land tax, it's generally assessed once a year while you continue to own the land. For property investors, it's one of several ongoing holding costs to budget for alongside:
Home loan repayments
Council rates
Insurance
Maintenance and repairs
Property management fees
Land tax rules vary by state and territory
For example, the Northern Territory is currently the only Australian jurisdiction that doesn't impose land tax. Before buying an investment property or changing how you use an existing property, check the rules that apply where the land is located.
Land tax vs stamp duty
Although both are state-based property taxes, they apply at different stages of property ownership.
Land tax | Stamp duty |
|---|---|
Annual tax that may apply while you own eligible land | Generally a one-off cost when buying property |
Usually based on the unimproved or site value of the land | Generally based on the property's purchase price or dutiable value |
May apply to investment properties, holiday homes and other taxable land | Paid by most property buyers, although exemptions and concessions may apply |
Assessed annually by state or territory revenue authorities | Paid when a property transaction occurs under state or territory rules |
You might also be interested in: Home loans 101: Stamp duty
Who pays land tax in Australia?
Land tax doesn't apply to every property owner. It most commonly applies to investment properties and other land that isn't your principal place of residence. Whether you need to pay land tax depends on where the property is located, its taxable land value, how it's used and who owns it.
As each state and territory has its own rules, thresholds and exemptions, your obligations may differ depending on where your property is located.
Property owners who may pay land tax
Depending on your state's rules and the taxable value of your land, land tax may apply if you own:
Residential investment properties.
Holiday homes or second homes that don't qualify for a principal place of residence exemption.
Vacant land, unless an exemption or concession applies.
Commercial property.
Property owned by a company or trust, which may be subject to different thresholds, rates or assessment rules.
Keep in mind that land tax assessments can change over time as land values, ownership arrangements and state thresholds are updated.
Who is generally exempt from land tax?
Many owner-occupiers don't pay land tax because their home qualifies for a principal place of residence (PPR) exemption or similar concession. Eligibility requirements vary between states and territories.
Other land that may qualify for an exemption includes:
Your principal place of residence, if you meet your state's eligibility requirements.
Certain primary production land.
Some charitable, religious and public land.
If you move out of your home and rent it to tenants, your eligibility for a principal place of residence exemption may change. Before converting your home into an investment property, check how this could affect your land tax obligations.
Remember, how you own a property can affect how land tax is assessed. For example, many states apply different thresholds or assessment rules to individuals, companies and trusts. Foreign and absentee owners may also be subject to additional surcharges, depending on the jurisdiction.
So, before buying an investment property, it's worth understanding how your ownership structure could affect your ongoing costs.
How is land tax calculated?
Land tax isn't based on what you paid for your property or its current market value. Instead, each state and territory calculates land tax using its own rules, including the taxable value of the land, applicable thresholds and tax rates.
While the calculation differs across Australia, three key factors determine how land tax is assessed.
1. Land value, not property value.
In most states and territories, land tax is based on the unimproved land value or site value assessed by the relevant Valuer-General or government valuation authority. This reflects the value of the land itself and generally excludes the house, landscaping and other improvements.
Because land values are reassessed periodically, your land tax assessment may change over time, even if you haven't bought or sold the property.
2. Your landholdings may be aggregated.
If you own multiple properties in the same state or territory, their taxable land values may be combined before land tax is calculated. This is known as aggregation.
For example:
Property | Taxable land value |
|---|---|
Property A | $550,000 |
Property B | $600,000 |
Total aggregated land value | $1.15 million |
If both properties are in New South Wales, the combined land value of $1.15 million may exceed the general land tax threshold, even if neither property would be liable on its own.
Aggregation rules vary by jurisdiction, so check how your state or territory assesses multiple landholdings.
3. Each state and territory calculates land tax separately.
Land tax is administered independently by each state and territory.
If you own property in more than one jurisdiction, you'll generally receive a separate assessment for each.
States and territories also have different:
Tax-free thresholds
Land tax rates
Valuation methods
Assessment dates
Aggregation rules
As a result, the amount of land tax you pay can differ significantly depending on where your property is located.
Land tax thresholds, rates and surcharges by state and territory
Although every Australian state or territory imposes land tax differently, most consider factors such as the value of your land, how it's owned and how it's used. The summaries below highlight the current land tax thresholds, assessment rules and key differences in each state and territory.
Use the table below to quickly compare land tax thresholds, assessment dates and key rules.
State or territory | Assessment date | Individual threshold | Foreign/absentee surcharge | Is your home generally exempt? |
|---|---|---|---|---|
NSW | 31 December | $1,075,000 | 5% surcharge land tax may apply to eligible foreign owners | Yes, if PPR eligibility requirements are met |
VIC | 31 December | $50,000 | 4% absentee owner surcharge | Yes, if PPR eligibility requirements are met |
QLD | 30 June | $600,000 | Absentee surcharge may apply to eligible foreign owners and entities | Yes, if the property qualifies as your principal place of residence |
WA | 30 June | $300,000 | No separate foreign owner surcharge for land tax | Yes, if eligibility requirements are met |
SA | 30 June | $936,000 | No separate foreign or absentee land tax surcharge | Yes, if eligibility requirements are met |
TAS | 1 July | $125,000 | 2% foreign investor surcharge may apply to eligible residential land | Yes, if eligibility requirements are met |
ACT | Quarterly (1 Jul, 1 Oct, 1 Jan, 1 Apr) | No tax-free threshold | No separate foreign or absentee land tax surcharge | Yes, if the property qualifies as your principal place of residence |
NT | Not applicable | No land tax | Not applicable | Not applicable |
New South Wales
If you own investment property or other taxable land in New South Wales, you may need to pay land tax if the combined taxable value of your NSW land exceeds the state's threshold. Revenue NSW assesses land tax each year based on the land you own at midnight on 31 December.
New South Wales land tax | Current details |
|---|---|
Assessment date | Midnight on 31 December each year |
General threshold | $1,075,000 |
Premium threshold | $6,571,000 |
General rate | $100 plus 1.6% of the taxable land value above the general threshold |
Premium rate | 2% of the taxable land value above the premium threshold |
Foreign owner surcharge | A 5% surcharge may apply to foreign owners of residential land, subject to Revenue NSW rules and exemptions. |
Principal place of residence | Generally exempt if you meet the eligibility requirements |
Common exemptions | Eligible primary production land, certain boarding houses, retirement villages, aged care facilities, charitable land and other exempt land under NSW legislation. |
Key things to know about land tax in New South Wales:
Land tax is generally assessed on the combined taxable value of your NSW landholdings.
Taxable land values are determined by the NSW Valuer General, not your purchase price or the property's market value.
Revenue NSW generally uses the average of the past three years' land values, where applicable, to calculate land tax.
If you own land in another state or territory, it's assessed separately under that jurisdiction's land tax rules.
2026 update: Principal place of residence exemption
From the 2026 land tax year, the person or persons occupying a property must collectively hold at least a 25% ownership interest to qualify for the principal place of residence (PPR) exemption. Check Revenue NSW for the latest eligibility requirements.
You might also be interested in: How does stamp duty work in NSW?
Victoria
Victoria has one of the lowest land tax thresholds. If you own investment property or other taxable land, land tax may apply once the combined taxable site value of your Victorian land exceeds $50,000 for individuals. Additional rules may also apply to trusts, absentee owners and vacant residential properties.
Victoria land tax | Current details |
|---|---|
Assessment date | Midnight on 31 December each year |
General threshold (individuals) | $50,000 |
Trust threshold | $25,000 |
Absentee owner surcharge | 4% of the taxable land value |
Temporary COVID Debt Levy | Applies to eligible landholdings above specified taxable value thresholds from 2024 to 2033 |
Vacant Residential Land Tax (VRLT) | May apply to eligible residential properties that remain vacant, subject to Victorian Government eligibility rules and exemptions |
Principal place of residence | Generally exempt if you meet the eligibility requirements |
Common exemptions | Eligible primary production land, certain retirement villages, charitable land and other exempt land under Victorian legislation |
Key things to know about land tax in Victoria:
Land tax is generally based on the combined site value of your Victorian landholdings.
Site value reflects the land's value and generally excludes buildings and other improvements.
Individuals generally become liable once the combined taxable site value exceeds $50,000.
Trusts are generally assessed under different rules, including a lower threshold.
Depending on your circumstances, you may also need to pay other property taxes in addition to standard land tax.
Temporary COVID Debt Levy: Applies to eligible landholdings above specified taxable value thresholds and is scheduled to operate until 2033.
Absentee owner surcharge: Eligible absentee owners may pay an additional 4% surcharge on taxable land.
Vacant Residential Land Tax (VRLT): May apply to eligible residential properties that remain vacant for a specified period, subject to eligibility rules and exemptions.
These charges are separate from standard land tax and have their own eligibility criteria.
You might also be interested in: How does stamp duty work in Victoria?
Queensland
Queensland land tax may apply if the total taxable value of your Queensland land exceeds the relevant threshold. The threshold depends on who owns the land, with different rules applying to individuals, companies, trustees and absentee owners. Unlike the previous system, only Queensland land is now included when calculating your land tax liability.
Queensland land tax | Current details |
|---|---|
Assessment date | Midnight on 30 June each year |
Individual threshold | $600,000 |
Company, trustee and absentee threshold | $350,000 |
Assessment basis | Total taxable value of eligible Queensland land |
Absentee owner surcharge | An additional surcharge may apply to eligible foreign companies, trustees and absentee owners |
Principal place of residence | Generally exempt if your home qualifies as your principal place of residence |
Common exemptions | Eligible primary production land, charitable land and other exempt land under Queensland legislation |
Key things to know about land tax in Queensland:
Individuals generally become liable once the total taxable value of their Queensland land exceeds $600,000.
Companies, trustees and absentee owners generally have a lower threshold of $350,000.
If you own more than one property in Queensland, the taxable value of your eligible Queensland land is generally aggregated.
Only land located in Queensland is included in your land tax assessment.
Different rules apply to companies and trustees
Companies and trusts are generally assessed under different land tax rules and have a lower taxable threshold than individuals. Depending on your ownership structure, different tax rates and assessment rules may also apply.
If you're considering buying property through a company or trust, seek independent tax advice before deciding on an ownership structure.
Additional charges for absentee owners
Eligible absentee owners may be liable for an additional land tax surcharge.
Whether the surcharge applies depends on factors such as your residency status, ownership structure and the type of land you own.
You might also be interested in: How does stamp duty work in Queensland?
Western Australia
If you own taxable land in Western Australia, you may need to pay land tax once the aggregated taxable value of your land exceeds $300,000. RevenueWA assesses land tax each year based on the land you own at midnight on 30 June.
Unlike some other states, Western Australia doesn't currently impose a foreign owner surcharge on annual land tax. However, eligible foreign buyers may still need to pay foreign transfer duty when purchasing residential property.
Western Australia land tax | Current details |
|---|---|
Assessment date | Midnight on 30 June each year |
General threshold | $300,000 aggregated taxable land value |
Rates | Nil up to $300,000, then progressive rates apply, starting with a $300 charge for land valued between $300,001 and $420,000 |
Metropolitan Region Improvement Tax (MRIT) | Applies to eligible land in the Perth metropolitan area at 0.14% of the aggregated taxable value above $300,000 |
Foreign owner surcharge | No separate foreign owner surcharge applies to Western Australian land tax |
Principal place of residence | Generally exempt if you meet the eligibility requirements |
Common exemptions | Eligible primary production land, charitable land and other exempt land under Western Australian legislation |
Key things to know about land tax in Western Australia:
Land tax generally applies once the aggregated taxable value of your eligible land exceeds $300,000.
If you own multiple taxable properties, RevenueWA generally aggregates the value of your eligible Western Australian landholdings.
Land tax is charged on a progressive scale, so the amount payable increases as the value of your landholdings grows.
Additional charges for Perth landowners
If your land is in the Perth metropolitan area, you may also need to pay the Metropolitan Region Improvement Tax (MRIT). This is separate from land tax and applies to eligible land with an aggregated taxable value above $300,000.
Foreign buyers
Western Australia doesn't currently impose a foreign owner surcharge on annual land tax. However, eligible foreign purchasers of residential property may still be required to pay foreign transfer duty. This is a one-off purchase cost and is separate from annual land tax.
You might also be interested in: How does stamp duty work in Western Australia?
South Australia
South Australia calculates land tax based on the total aggregated site value of your taxable land in the state. Land tax may apply once the combined site value of your land exceeds the relevant threshold, with progressive rates applying as the value of your landholdings increases.
Unlike some states, South Australia adjusts its general land tax threshold each year in line with changes in average site values.
South Australia land tax | Current details |
|---|---|
Assessment date | Midnight on 30 June each year |
General threshold | $936,000 (2026–27) |
Trust threshold | $25,000 |
Assessment basis | Total aggregated site value of taxable South Australian land |
Rates | Progressive rates apply once the relevant threshold is exceeded |
Foreign owner surcharge | No separate foreign owner surcharge applies to annual land tax. Eligible foreign purchasers may need to pay a foreign ownership surcharge on transfer duty instead. |
Principal place of residence | Generally exempt if you meet the eligibility requirements |
Common exemptions | Eligible primary production land, charitable land and other exempt land under South Australian legislation |
Key things to know about land tax in South Australia:
Land tax generally applies once the combined taxable site value of your South Australian land exceeds $936,000.
RevenueSA generally aggregates all eligible landholdings under the same ownership.
Progressive rates apply, so the amount of land tax increases as the value of your landholdings grows.
The general land tax threshold is indexed annually in line with changes in average site values.
Different rules apply to trusts
Land held in many trusts is assessed under a separate land tax scale. For the current land tax year, the trust threshold is $25,000, with different rates generally applying to eligible trust landholdings.
The assessment date matters
If you sell a property after 30 June, the owner recorded at midnight on 30 June generally remains liable for that year's land tax assessment. Buyers and sellers may agree to adjust land tax at settlement, but RevenueSA generally issues the assessment to the owner at the assessment date.
You might also be interested in: How does stamp duty work in South Australia?
Tasmania
If you own taxable land in Tasmania, you may need to pay land tax once the taxable land value exceeds $125,000. The State Revenue Office Tasmania assesses land tax each year based on the ownership and use of the land on 1 July.
Unlike some other states, Tasmania generally assesses land tax on each parcel of land rather than aggregating multiple landholdings.
Tasmania land tax | Current details |
|---|---|
Assessment date | 1 July each year |
General threshold | $125,000 taxable land value |
Rates | Progressive rates apply once the threshold is exceeded |
Foreign investor surcharge | A 2% surcharge may apply to eligible foreign owners of residential land acquired on or after 1 July 2022. |
Principal place of residence | Generally exempt if you meet the eligibility requirements |
Common exemptions | Eligible primary production land, charitable land and other exempt land under Tasmanian legislation |
Key things to know about land tax in Tasmania:
Land tax generally applies once the taxable land value exceeds $125,000.
Tasmania generally assesses land tax based on the ownership and use of each parcel of land on the assessment date.
Progressive rates apply, so the amount of land tax increases as the land's taxable value increases.
The assessment date matters
Land tax is generally assessed based on who owns the land and how it's used on 1 July each year. If you've recently bought, sold or changed the use of a property, the assessment date may affect your land tax liability for that year.
Foreign investor surcharge
Eligible foreign owners of residential land acquired on or after 1 July 2022 may also be liable for a 2% foreign investor surcharge. This surcharge is separate from standard land tax and is subject to the eligibility rules and available exemptions.
You might also be interested in: How much is stamp duty in Tasmania?
Australian Capital Territory
The ACT has a different land tax system from every other Australian jurisdiction. There is no tax-free threshold, so land tax may apply from the first dollar of taxable residential land. It generally applies to rented residential properties and other eligible residential land rather than owner-occupied homes.
Australian Capital Territory land tax | Current details |
|---|---|
Assessment dates | 1 July, 1 October, 1 January and 1 April |
Tax-free threshold | None |
Assessment basis | Average Unimproved Value (AUV) of the land |
Rate | Fixed annual charge plus a percentage of the Average Unimproved Value (AUV) |
Properties generally subject to land tax | Rented residential properties, vacant residential land and rented granny flats |
Principal place of residence | Generally exempt if you meet the eligibility requirements |
Commercial property | Land tax generally doesn't apply to commercial properties |
Key things to know about land tax in the ACT:
There is no tax-free threshold for taxable residential land.
Land tax is calculated using the property's Average Unimproved Value (AUV) rather than its market value or purchase price.
Land tax generally applies to rented residential properties, vacant residential land and rented granny flats.
Commercial properties generally aren't subject to ACT land tax.
Quarterly assessments
Unlike other jurisdictions that generally issue an annual assessment, the ACT assesses land tax quarterly on 1 July, 1 October, 1 January and 1 April.
If the ownership or use of your property changes during the year, it may affect your land tax liability.
You might also be interested in: How does stamp duty work in the ACT?
Northern Territory
The Northern Territory is the only territory that doesn't currently impose annual land tax. This means property owners don't pay land tax on their landholdings, regardless of the property's value or use.
However, property owners may still need to pay other property-related costs, including council rates, and buyers may still be liable for transfer duty when purchasing property.
Remember, land tax can be a high ongoing cost for property investors, but how much you pay depends on where you buy and your individual circumstances. Understanding the rules in your state or territory can help you estimate holding costs and avoid unexpected expenses.
You might also be interested in: How much is stamp duty in the Northern Territory?
Land tax exemptions
Not every property owner pays land tax. While eligibility varies by state and territory, most jurisdictions provide exemptions for certain types of land or property ownership. The most common is the principal place of residence (PPR) exemption.
If your circumstances change, for example, you move out of your home, inherit a property or start renting it out, your eligibility for an exemption may also change.
Principal place of residence exemption
In most states and territories, your principal place of residence is generally exempt from land tax if you meet the relevant eligibility requirements.
To qualify, you typically need to live in the property as your main residence. Each jurisdiction has its own rules around ownership, occupancy and when an exemption starts or ends.
If you own property in NSW, note that from the 2026 land tax year, property owners generally need to hold at least a 25% ownership interest to claim the principal place of residence exemption.
If you're unsure whether your home qualifies, check the eligibility requirements with your state or territory revenue office.
Primary production land
Eligible primary production land may also qualify for a land tax exemption. While the rules differ between jurisdictions, these exemptions generally apply to land genuinely used for activities such as farming, grazing or horticulture.
Owning rural land alone doesn't automatically qualify you for an exemption. Most states assess how the land is used and whether the relevant legislative requirements are met.
Deceased estates
Many states and territories provide a temporary land tax exemption or concession for deceased estates while property ownership is being transferred.
The length of the exemption and the eligibility requirements vary between jurisdictions. If you're administering an estate or have inherited property, check when land tax may become payable.
Renting out your home
Moving out of your home and renting it to tenants may affect your principal place of residence exemption. Whether the exemption continues (and for how long) depends on your state's rules.
Before turning your home into an investment property, check how the change could affect your ongoing land tax costs.
Is land tax deductible?
In many cases, yes. If you own an income-producing property, such as a rental investment property, land tax is generally deductible in the financial year it's incurred.
The Australian Taxation Office (ATO) generally treats land tax as an eligible rental expense for income-producing properties. However, whether you can claim a deduction depends on how the property is used and your individual circumstances.
For example:
Land tax may generally be deductible for properties used to earn rental income.
Different tax rules may apply if the property is your principal place of residence or isn't producing assessable income.
Because tax outcomes vary depending on various factors, check the ATO's guidance on rental expenses or speak with a registered tax adviser before lodging your tax return.
How Aussie can help
An Aussie Broker can help you factor in ongoing costs, such as land tax, into your borrowing capacity and investment budget. For advice about tax deductions, speak with a registered tax adviser or accountant and refer to the ATO's guidance on rental expenses.
You might also be interested in: Tax tips for property investors: What you can claim this EOFY
Understanding land tax before you invest
Land tax can significantly affect the ongoing costs of owning an investment property, but the rules aren't the same across Australia. Thresholds, exemptions, assessment methods and surcharges vary by state and territory, while your principal place of residence is generally exempt if you meet the relevant eligibility requirements.
Before buying, selling or changing how you own or use a property, confirm the latest land tax rules with your state or territory revenue office, as thresholds, exemptions and surcharges can change.
Understanding your potential land tax obligations before you buy can help you budget more accurately, compare investment opportunities across different states and reduce the risk of unexpected holding costs.
If you're planning to invest, an Aussie Broker can help you understand how land tax fits into your overall borrowing strategy, compare lending options and factor ongoing holding costs into your property budget.