Land tax is a tax levied on the owners of land in each state in Australia. It is a State Tax so it differs between states.
In New South Wales (NSW) and Victoria it as levied as at midnight on the 31 December of each year. Land tax applies to land regardless of whether income is earned from the land. Land tax is an annual tax levied on the owners of land. For example, the 2013 assessment is based on land holdings as at midnight on 31 December 2012.
In general, your principal place of residence (your home) is exempt from land tax.
You may be liable for land tax if you own:
- vacant land, including vacant rural land
- a holiday house
- one or more investment properties
In NSW the general threshold is $482,000 – in other words you can own that amount of land (NB Not land and building, land only) before paying tax. In Victoria, generally if your land holdings have a total taxable value of $250,000 ($25,000 for trusts subject to surcharge) or more (excluding exempt land) you must pay land tax. For all entities, trusts and superannuation funds for example) there is generally NO threshold in NSW.
Land Tax by state is another reason (although not as important as others) why we believe in diversification of a property portfolio. In this way a property investor can take advantage of the total thresholds in each state before becoming liable to any land tax.
