KEY TAKE OUTS:
- For the Land Tax year commencing from 1 January 2025, you must own at least 25% of the property, either solely or jointly with another individual to claim the principal place of residence land tax exemption for the 2025 calendar year
- You must have continually used and occupied the land for residential purposes since 1 July in the preceding calendar year, or a minimum of six consecutive months if a recent purchase
- Where the exemption applies, it applies for the benefit of all joint owners if one is eligible, unless a joint owner is a company or trustee
Principal Place of Residence Exemption Change in NSW
As announced by NSW Revenue previously, individuals who purchased and occupy property in NSW from 1 February 2024, but own a share of less than 25%, will no longer be entitled to the Principal Place of Residence (PPR) Land Tax exemption for the 2025 land tax year onwards.
Owners who were eligible for the principal place of residence exemption prior to 1 February 2024, can claim the exemption for the 2025 tax year and will then become liable to pay land tax from the 2026 land tax year owned property.
In short, if you are purchasing and occupying a property for the Land Tax year commencing from 1 January 2025, you must own at least 25% of the property, either solely or jointly with another individual to claim the principal place of residence land tax exemption for the 2025 calendar year.
To be eligible for the exemption you must have continually used and occupied the land for residential purposes since 1 July in the preceding calendar year, or a minimum of six consecutive months if it is a recent purchase of land.
Where the exemption applies, it applies for the benefit of all joint owners if one is eligible, unless a joint owner is a company or trustee.
Please see below table for a visual representation:
| Purchase prior to 1 February 2024
|
Own less than 25% share, occupy land and meet PPR eligibility | 2025 Land Tax year – exempt | 2026 Land Tax year – NOT exempt |
| Purchase on or after 1 February 2024
|
Own less than 25% share, occupy land and meet PPR eligibility | 2025 Land Tax year – NOT exempt | 2026 Land Tax year – NOT exempt |
| Purchase on or after 1 February 2024 | Own more than 25% share, occupy land and meet PPR eligibility | 2025 Land Tax year –exempt | 2026 Land Tax year –exempt |
2025 Land Tax Threshold
The Revenue Legislation Amendment Bill 2024 introduced important changes to land tax thresholds.
From 1 January 2025 land tax thresholds will be fixed at:
- General threshold: $1,075,000
- Premium threshold: $6,571,000
These thresholds will remain unchanged for future land tax years. The freeze applies to both general and premium thresholds.
The Treasurer will assess these thresholds by 1 June 2027 to ensure they remain appropriate for property owners and market conditions.
Increase to surcharge land tax rates for foreign owners
From 1 January 2025 the surcharge land tax rate for foreign owners will increase from 4% to 5%.
This means 2025 surcharge land tax assessments will be assessed at 5% of the total residential land value.
Further information can be found at the below links:
https://www.revenue.nsw.gov.au/news-media-releases/preparing-for-the-2025-land-tax-year
ABOUT KAY VITOGIANNIS:
Kay joined the Coutts team in May 2021 working as a Licensed Conveyancer within our Property & Conveyancing team, based in our Narellan office.
Kay has over 20 years of experience in the Legal industry. She began her journey in CBD Conveyancing firms as a secretary and attained her Advanced Diploma in Conveyancing in December 2010.
For further information please don’t hesitate to contact:
Kay Vitogiannis
Licensed Conveyancer
info@couttslegal.com.au
1300 268 887
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.
