Who pays land tax?
On the taxing date, the land’s owner pays the land tax. This is the annual day when the state checks land ownership. A self-managed super fund, trust, company, joint owners, or one person may own the land. NSW sets a $1,075,000 general threshold. An individual pays once the combined value of their land exceeds it. This amount is exempt from tax, so land below the threshold owes no land tax. A lower tax-free amount applies to many trusts and foreign owners, but some have no exemption.
Why do I have to pay land tax?
States charge land tax on land other than your own home, including a rental property or an empty block. State Revenue Office Victoria says the land tax helps fund public services and encourages good land use. The ACT collects the tax for a range of essential services.
You still pay when the land brings in no money. Revenue NSW confirms that land tax applies regardless of any income from the land.
Is land tax payable every year?
Yes. The state identifies the owner on the annual taxing date, who then receives the bill for that year. In Victoria, selling land during the year does not change your duty to pay the full year's land tax.
| State or territory | Threshold | Land tax year |
|---|---|---|
| New South Wales | $1,075,000 | 2026 land tax year |
| Victoria | $50,000 | 2026 land tax year |
| Queensland | $600,000 | 2026-27 |
| Western Australia | $300,000 | 2026-27 |
| South Australia | $936,000 | 2026-27 |
| Tasmania | $125,000 | 2026-27 |
| Australian Capital Territory | No threshold | 2026-27 |
| Northern Territory | No land tax | No land tax |
Sources: Revenue NSW, State Revenue Office Victoria, Queensland Revenue Office, RevenueWA, RevenueSA, State Revenue Office Tasmania, ACT Revenue Office, Territory Revenue Office.
Joint owners and couples
The state first treats people who share land ownership as one owner. Under Revenue NSW, joint owners receive one tax-free amount for their shared land. One NSW threshold applies to a couple's shared rental, not two.
Each owner also pays tax on their own share and on any land they own alone. The state deducts a small amount to avoid taxing shared land twice. In Victoria, each separate group of joint landowners counts as its own joint owner.
Land tax for companies
Like any other owner, a company pays land tax based on the total value of its land. NSW gives companies the benefit of the land tax threshold. Linked companies use a single threshold between them.
Queensland sets a lower starting value for companies and trusts. Companies become liable for land tax when their land reaches $350,000 or more. The starting point for a person is $600,000.
Land tax for trusts
Trust rules vary the most between states. A trust lets people own land for the benefit of others. A trustee can be a person or company that owns the land legally and manages it for the people who benefit. Whether a trust receives a tax-free amount depends on the state.
- Special trusts in NSW Family trusts, discretionary trusts, many unit trusts, and trusts set up by a will fall within this group. With a discretionary trust, the trustee chooses who benefits. In a unit trust, people buy units, like shares. They cannot claim the land tax threshold. Their tax is 1.6% for every dollar of land value. Land above $6,571,000 falls under a second, higher limit known as the premium threshold. The rate on value beyond that limit increases to 2%.
- Fixed trusts in NSW Each person's share is fixed in advance within a fixed trust. Some unit trusts and bare trusts count as fixed trusts, so they can use the land tax threshold. In a bare trust, the trustee simply holds land for one owner.
- Victoria. Other owners pay lower rates, but Victoria calls the higher rates paid by trusts the land tax trust surcharge rates. The surcharge rates begin at a land value of $25,000.
- Queensland. A trustee pays tax once the land held for the trust reaches $350,000 or more.
- South Australia. Trust rates begin at a threshold of $25,000 for trusts when the trust does not qualify for the general rates.
SMSF land tax
Short for self-managed super fund, an SMSF is a retirement savings fund you run yourself. Its trustee owns the land. A super fund trust receives the land tax threshold, according to Revenue NSW. In Queensland, super fund trustees pay the company and trust rates. An example from the Queensland Revenue Office shows a fund with $760,000 of land paying $8,420.
Absentee owners and foreign owners
Foreign owners must pay land tax, as must absentee owners, who are people who normally live overseas. Most states add a further charge, called a surcharge, for them. In NSW, this surcharge land tax applies and no tax-free amount is allowed. The guide to land tax surcharges provides all the rules for each state.
| State or territory | Surcharge | Rate |
|---|---|---|
| New South Wales | Surcharge land tax | 5% of the residential land value |
| Victoria | Absentee owner surcharge | 4% of the taxable value |
| Queensland | Absentee surcharge | 3% of the taxable value above $350,000 |
| Queensland | Foreign surcharge | 3% of the taxable value above $350,000 |
| Western Australia | Not charged | No surcharge |
| South Australia | Not charged | No surcharge |
| Tasmania | Foreign investor land tax surcharge (FILTS) | 2% of the assessed land value |
| Australian Capital Territory | Foreign ownership surcharge | 0.75% of the average unimproved value |
| Northern Territory | Not charged | No surcharge |
Questions
Who pays land tax in Australia?
Land tax is paid by the person who owns the land on the taxing date. The owner may be one person, joint owners, a company or a trustee. Queensland lists owner types (individuals, companies, trusts and absentees) as owners who may have to pay. Absentees are owners who live overseas.
What land tax threshold applies to couples in NSW?
For land they own together, people use a single tax-free amount. A shared rental for a couple has one $1,075,000 threshold. Each partner also pays tax on their share and on any land they own alone.
Does NSW charge land tax for discretionary trusts?
Yes, and there is usually no tax-free amount. Revenue NSW includes discretionary and family trusts in the special trust category. Up to the premium threshold, the rate is 1.6% of the land value, starting from the first dollar.
How can I avoid paying land tax in NSW or Victoria?
No land tax applies only if the state exempts your land or its value is less than the threshold. The home you live in and farmland are common exemptions. A registered tax agent can check your situation. The information here is general only.
Does land tax apply to an SMSF?
That is possible. Ownership rests with the fund's trustee. The fund owes tax when the land value exceeds the threshold that applies to it. In NSW, super funds receive the general threshold. Trustees in Queensland use the $350,000 threshold.