With some of our most significant cities in lockdowns, land lax has been in the news of late as some state or territory governments could be offering eligible landlords a reduction on their land tax liability for 2021 if they provide tenants with rent relief.

In NSW, for example, residential landowners can receive land tax relief or claim a subsidy of up to $3,000 per tenancy agreement if they offer reductions to a renter from 14 July 2021 to 31 December 2021 to a tenant who has lost 25% or more of household income due to COVID-19[i].

For those new to property investing or considering an investment, it’s very much worth factoring land tax into your consideration as one of several charges you may be required to pay when you buy property. 

Unlike a one-off charge like stamp duty, you must pay the land tax levy annually to your state or territory government, except if the property is in the Northern Territory. 

Land tax is a government charge on the value of any land you own or co-own above a certain value threshold depending on your state or territory. In NSW, for example, the general threshold for 2021 is $755,000[ii]. In Queensland, landlords are liable for land tax if the total taxable value of the freehold land on 30 June was $600,000 or more[iii].

Land tax also applies to vacant land you plan to build on or the land on which the investment property is already built. 

To work out how much land tax you might pay on a property, most of the state and territory government’s offices of state revenue provide online calculators to help you determine the annual charge. 

Typically for tax purposes, your land is valued by your state or local council. To find out more about land tax in your state and territory, please talk to your accountant. 

If you’re interested in buying an investment property, the expert sales team at your local Raine & Horne office can help guide you through the entire process, from start to finish. Contact your local Raine & Horne office today to find out more. 

[i] https://www.treasury.nsw.gov.au/sites/default/files/2021-08/Damien%20Tudehope%20Kevin%20Anderson%20med%20rel%20-%20Land%20tax%20relief%20for%20landowners%20and%20tenants%20affected%20by%20COVID-19.pdf

[ii] https://www.revenue.nsw.gov.au/taxes-duties-levies-royalties/land-tax

[iii] https://www.qld.gov.au/environment/land/tax/calculation/threshold