Are You Liable to Pay Land Tax?
If you own any property that is not your principal place of residence, including a holiday house or unit, you may be liable to pay Land Tax. This includes property that does not earn any income. Your will need to register with Revenue NSW register for land tax.
The amount of Land Tax payable depends on the combined value of any Taxable Land you own or have an interest in, excluding exempt land. The value of Taxable Land does not include any structural improvements, such as a house. Also, you do not pay Land Tax in NSW on any properties you own outside of NSW.
Your home or as it is termed your “principal place of residence” is generally exempt from Land Tax. There are however certain other exemptions, which may apply and we can advise you if property owned by you is exempt from the payment of Land Tax.
The land tax threshold is $692,000.
The amount of tax paid is $100 plus 1.6% up to the land value between the threshold and the premium rate threshold, $4,231,000, and 2% thereafter.
Where land is owned in partnership, regardless of the number of partners, the threshold is still $692,000.
An individual’s interest in a partnership may also be assessed if that owner holds other land individually or with other partnerships.
Since 2007, the value used to determine your land tax liability will generally be the average of the land value for the current tax year and the land values for the previous two years. Where a parcel of land was only recently created (eg by subdivision or amalgamation) the average value will be based only on the land values for those taxing dates when the newly created land item did exist.