What is Land Tax?
Land Tax is an annual tax charged on the land value of all the property you own that is over and above the land tax threshold. Although, in saying that, your principal place of residence is usually exempt and not taken into account when determining your land tax liability. Acquired property in the last 12 months? You better read on to see if land tax applies to you.
2022 Land Tax Thresholds
Revenue NSW has announced the Land Tax thresholds for 2022 are as follows:
- General threshold: $822,000
- Premium threshold: $5,026,000
The general threshold for 2022 has increased by $67,000 from 2021. The general threshold for 2021 was $755,000. The premium threshold for 2022 has increased by $410,000. The premium threshold for 2021 was $4,616,000.
How is land tax calculated?
Land Tax is calculated on the total value of all your taxable land above the threshold. If the combined value of your land does not exceed the threshold, no land tax is payable by you.
The rate of tax is calculated as $100 plus 1.6% of the land value up to the value of the premium threshold. The rate of tax increases to 2% after the premium threshold.
The threshold is applied to land holdings on 31 December each year and is applied for the full year following the taxing date of 31 December. No pro-rata calculation applies.
How is the land value determined?
Land value is determined by the valuations issued by the Valuer-General to Revenue NSW. The valuation from the previous year is used. For example, the 2021 value is used for the 2022 tax year. Note: the value is based on land-only and does not take into consideration any improvements on the land.
What do I do if I think I may be liable to pay Land Tax?
If you haven’t received a notice of assessment you can register online or phone Revenue NSW on 1300 139 816.
It is your responsibility to register for Land Tax if the value of all your taxable land is above the threshold. It is not the responsibility of Revenue NSW to notify you that you are required to be registered and/or follow up payment. This is the case even if you haven’t received a notice of assessment from them.
Failure to register for land tax may result in penalties such as interest charges.
ABOUT MELINA COSTANTINO
Melina has over 9 years of experience as a Licensed Conveyancer, acting for client matters involving; purchase and sale of residential and commercial property, Retirement Village Contracts, Put & Call Options, Call Options, and Family Transfers. She is passionate about helping a wide range of clients across all aspects of the buying and selling process and ensuring that her clients meet all their legal obligations.
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This blog is merely general and non-specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.