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What Tax will I pay when I buy land?
When purchasing a property and land you will pay land tax and or transfer/stamp duty in NSW.
Transfer/tamp duty is a tax that is payable to the NSW Government when purchasing a property. Revenue NSW has a calculator which will help you determine and estimate the tax that will be payable by you for a property purchase.
Between the time of contract for sale being exchanged and settlement the team at ALA Law will be able to advise the stamp duty/transfer tax payable on your purchase. For further information on transfer duty see Revenue NSW page.
Land Tax is a separate tax that is also payable on land. Land tax is a annual tax levied against any land that is above the land tax threshold which is paid each calendar year. This must be adjusted (if it applies to our purchase) on settlement of the property. If the property you are purchasing in your principal place of residence, then it will generally be exempt from land tax.
Revenue NSW states that land tax is payable when you own, or jointly own:
- vacant land, including rural land
- land where a house, residential unit or flat has been built
- a holiday home
- an investment property or properties
- company title units
- residential, commercial or industrial units, including car spaces
- commercial properties, including factories, shops and warehouses
- land leased from state or local government.
Additionally, you may have to pay land tax if:
- You are deemed a foreign owner for land tax purposes (this includes properties opted into property tax).
- You are a not-included owner for a property opted into property tax and your aggregated land value of all properties owned is above the land tax threshold.
Land tax applies regardless of whether income is earned from the land. Full details can be found here: https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/land-tax#heading1
Revenue NSW also provides the following table to show the land tax threshold as they apply historically and currently.
From 2024 onwards, the land tax thresholds and rates will be applied as follows:
- General threshold: $100 plus 1.6% of land value above the threshold, up to the premium threshold.
- Premium threshold: $88,036 plus 2% of land value above the threshold.
- Land tax is applied for the full year following the taxing date of 31 December, and no pro-rata calculation applies
If you think you might be liable to pay landtax, click here for access to a free calculator.
At ALA Law we can assist to determine that there may be land tax payable on your purchase and guide you in the direction of a qualified professional to assist you and provide you with advice.
| Tax year | General threshold | Premium |
|---|---|---|
| 2024 onwards | $1,075,000 | $6,571,000 |
| 2023 | $969,000 | $5,925,000 |
| 2022 | $822,000 | $5,026,000 |
| 2021 | $755,000 | $4,616,000 |
| 2020 | $734,000 | $4,488,000 |
| 2019 | $692,000 | $4,231,000 |