NSW Land Tax 2026: Essential Information for Property Owners

If you own a property in NSW, you may be uncertain about how land tax affects you or whether it applies to your circumstance. Many property owners find the rules on thresholds, exemptions and how it’s calculated complex. This overview explains what NSW land tax is, when it applies, and how it may affect your property investments.

What is land tax?

Land tax in NSW is imposed on landowners, based on the value of all taxable land above a certain threshold. Land tax is levied on the owners of land in NSW as of midnight on the 31st of December each year.

It is important to note that the tax assesses the land value alone, not including buildings or other improvements.

Exemptions and Concessions

There are several exemptions and concessions available that can significantly reduce or eliminate the land tax obligation. The most common exemption is for land used as your principal place of residence (PPR).

From 1 February 2024, the PPR exemption can only be claimed by any person(s) occupying a property if they hold at least a 25% ownership interest, either solely or collectively.

A transitional provision was provided to existing landowners who had already claimed the exemption prior to the change in requirement. Transitional provisions are temporary rules that bridge the gap between old and new legislation, allowing affected parties time to adapt to regulatory changes.

From the 2026 tax year onwards, if the total ownership of all individuals living in the property is less than 25%, the exemption will no longer apply.

You may be eligible for the PPR exemption if, for example:

• You live in the property and own 30% of it

• You and another owner live in the property, and own 15% and 20% respectively

You will not be eligible for the PPR exemption if, for example:

• You live in the property and own 10% of it, and no other owners live in the property

• You and another owner live in the property, and own 5% and 15% respectively

Additionally, land used for primary production, or owned by certain non-profit organisations, may also be exempt.

Land tax Thresholds and Rates

For the 2026 tax year, the land tax threshold will remain at $1,075,000.00 with tax rates applied to land values exceeding this amount. Specifically, the rate of tax for land values above the threshold is $100 plus 1.6% of land value up to the premium rate threshold, and 2% thereafter. The premium threshold is $6,571,000.00.

These thresholds and rates are pivotal for landowners to understand, as they determine the tax liability incurred.

When Does Land Tax Apply?

Land tax applies to landowners who own taxable land as of midnight on the 31st of December each year. If you own land above the threshold value at this time, you are liable to pay land tax for the ensuing year unless an exemption or concession applies.

This includes both individuals and entities such as companies, trustees, and partnerships holding land in NSW.

How Is Land Tax Calculated?

The calculation of land tax is based on the combined value of all taxable properties owned, utilising land values assessed by the Valuer General as of 1 July of the preceding year. Property owners are encouraged to review land valuation notices carefully, as these figures directly affect your land tax assessment.

NSW land tax can be complicated to understand with different thresholds, exemptions, and calculations to consider. Contact us today for personalised advice. We're here to help you navigate land tax and protect your property investments.