Land Tax Australia 2025-26: Complete State-by-State Guide

What Is Land Tax?

Land tax is an annual state or territory tax on the unimproved value of land you own. It's separate from council rates, income tax, stamp duty, and the Commonwealth tax system — each state runs its own regime with its own threshold, rates, exemptions, and surcharges.

Three features matter most:

• It's on land value, not property value. Your $800,000 Sydney house might have $450,000 of land value; the building on top doesn't count.
• It's aggregated across your portfolio. Own four apartments in Victoria? Their land values are added before applying the $50,000 threshold — aggregation often pushes small portfolios into high brackets.
• It's state-by-state. Land in Victoria aggregates with other Victorian land, but not with NSW land. Diversifying across states can reduce total land tax by spreading value under multiple thresholds.

Land tax assessments arrive annually (quarterly in ACT). You'll pay by instalments if the bill is large, or annually for smaller amounts. Overdue land tax attracts penalty interest, and unpaid land tax can trigger a charge on the property preventing sale.

Quick Comparison: Land Tax by State

The threshold and rate differences between jurisdictions are dramatic. A $500,000 taxable land holding produces the following annual liabilities:

Strategic insight: The same $500,000 of taxable land produces a $0 bill in NSW, QLD, SA, and NT; around $1,950 in Victoria; roughly $2,775 in Tasmania; and $6,000+ in the ACT. Over 10 years, that's a $60,000 difference on identical dollar value.

New South Wales

NSW has the most investor-friendly general threshold in Australia at approximately $1,075,000 (indexed annually by the Valuer General). Below this, residents pay no land tax regardless of how much rental property they own, provided the total aggregated value stays under the threshold.

Rates for 2025-26:

• General rate: $100 + 1.6% of land value above $1,075,000
• Premium rate: $88,036 + 2.0% of land value above $6,571,000
• Foreign person surcharge: 5% of total taxable land value (from first dollar — no threshold)

The 25% ownership rule

From February 2024, NSW requires at least 25% ownership of a property to claim the principal place of residence exemption. This closed a loophole where parents held 99% of a property while a child claimed the full PPOR exemption based on a 1% stake. If you're an existing minority owner, transitional provisions may preserve your exemption — check with Revenue NSW.

Trust surcharge

A 1.6% surcharge applies to discretionary trusts that don't have a fixed trust designation. Many older trust deeds inadvertently attract this. Amending the deed to meet fixed trust requirements can remove the surcharge.

Death grace period

Executors have 2 years from the date of death before land tax applies to the estate. Sale of the property within this window preserves the exemption.

Calculate NSW land tax →

Victoria

Victoria has the lowest general threshold on the mainland ($50,000), progressive rates up to 2.65%, a separate (and much lower) trust regime, and an absentee owner surcharge that catches many Australians living overseas. The COVID Debt Repayment Plan, legislated from 2024 through 2033, increased rates across multiple brackets.

Rates are heavily bracketed. Key 2025-26 levels for individuals:

Trust surcharge rates

Victorian trusts attract a lower threshold ($25,000) and additional surcharge rates (approximately 0.375% extra) up to $1.8 million. Holding a modest portfolio in a discretionary trust can cost 30–50% more in land tax than individual ownership.

Absentee owner surcharge

The 4% absentee surcharge applies in addition to base rates. "Absentee" includes Australian citizens who spend significant time overseas. The surcharge applies from the same $50,000 threshold as general rates.

Death grace period

Three years for the executor — the most generous of any state.

Calculate Victorian land tax →

Queensland

Queensland has a moderate threshold of $600,000 for individuals and applies progressive rates to six brackets. Queensland uses a unique interstate aggregation rule, where land owned in other states can be used to determine the rate applied to your Queensland land (but tax is only charged on Queensland land).

Key brackets for individuals:

• $600,000 – $999,999: $500 + 1.0% above $600k
• $1m – $2.999m: $4,500 + 1.65% above $1m
• $3m – $4.999m: $37,500 + 1.25% above $3m
• $5m – $9.999m: $62,500 + 1.75% above $5m
• $10m+: $150,000 + 2.25% above $10m

Interstate aggregation

Queensland can consider your non-Queensland land in determining your rate, not your tax. If you hold $500,000 in QLD and $2 million in NSW, QLD uses the $2.5 million total to determine the marginal rate applied to the $500,000 QLD portion — but NSW land itself isn't taxed by Queensland.

Foreign surcharge

2% absentee/foreign surcharge on total taxable land value.

Death grace period

QLD treats deceased estates more strictly than most: exemption lasts until the next 30 June after death (so up to 12 months, but sometimes only a few weeks).

Calculate Queensland land tax →

Western Australia

WA applies land tax from a moderately low threshold of $300,000. Rates are progressive but among the most predictable. A Metropolitan Region Improvement Tax (MRIT) of 0.14% applies to land in the Perth metro area above $300,000 on top of standard rates.

Key WA brackets:

• $300,000 – $419,999: $300 + 0.25% above $300k
• $420,000 – $999,999: $600 + 0.90% above $420k
• $1m – $1.799m: $5,820 + 1.80% above $1m
• $1.8m – $4.999m: $20,220 + 2.00% above $1.8m
• $5m – $10.999m: $84,220 + 2.67% above $5m
• $11m+: $244,420 + 2.67% above $11m

Foreign surcharge

4% foreign owner surcharge on total taxable land.

Death grace period

Two years from date of death for the executor to sell or transfer.

Calculate WA land tax →

South Australia

SA redesigned its land tax system in 2020 with sharply lower thresholds for trusts. The general threshold for individuals sits around $732,000. Trust thresholds are dramatically lower at $25,000 — less than 4% of the individual threshold.

Individual rates (rounded):

• $0 – $731,999: $0
• $732,000 – $1,175,999: 0.50% of value above $732k
• $1,176,000 – $1,707,999: $2,220 + 1.00% above $1.176m
• $1,708,000+: $7,540 + 2.40% above $1.708m

Trust surcharge

Trusts attract the $25,000 threshold and higher marginal rates. A trust holding $600,000 of land pays substantial tax while an individual pays nothing. This made many pre-2020 trust structures uneconomic overnight.

Foreign surcharge

7% — the highest foreign surcharge rate in Australia.

Death grace period

Up to 5 years for the executor — the most generous regime, recognising that rural and complex estates can take years to settle.

Calculate SA land tax →

Tasmania

Tasmania has a low threshold ($125,000) and progressive rates. Even modest investment properties attract land tax. Tasmania does not distinguish between trust and individual ownership for threshold purposes — both use the same $125,000 threshold.

Key brackets:

• $0 – $124,999: $0
• $125,000 – $499,999: $50 + 0.45% above $125k
• $500,000 – $999,999: $1,738 + 1.25% above $500k
• $1m – $1.999m: $7,988 + 1.50% above $1m
• $2m+: $22,988 + 1.50% above $2m

Foreign surcharge

2% foreign land tax on taxable land value.

Death grace period

Two years from date of death.

Calculate Tasmanian land tax →

Australian Capital Territory

The ACT has the most unusual land tax regime in Australia. It applies quarterly (not annually) and has no threshold — the first dollar of investment land value attracts tax. This makes even low-value investment property in Canberra costly compared to NSW or QLD.

Components:

• Fixed charge: approximately $1,462 per year ($365.50 per quarter)
• Marginal rate: progressive from 0.54% to 1.14% of average unimproved value
• Affordable Foreign Land Tax (AFLT): 0.75% surcharge for foreign persons

Quarterly assessment mechanics

Whether you owe land tax for a quarter depends on the property's status on the first day of that quarter (1 July, 1 October, 1 January, 1 April). This creates a genuine planning opportunity: if you're converting a former rental back to PPOR, move in before the quarter starts, not mid-quarter — you'll avoid that entire quarter's land tax.

Death grace period

The ACT's quarterly regime effectively gives a minimum of one quarter of grace. Longer exemption periods may apply where the executor is working toward sale or PPOR transition.

Calculate ACT land tax →

Northern Territory

The Northern Territory has no land tax. Full stop. This is a meaningful difference: identical $500,000 taxable land produces $0 in the NT, ~$2,775 in Tasmania, and over $6,000 in the ACT. Over 10 years, that's a $60,000+ difference on the same dollar exposure.

This has encouraged some Australian investors to look at Darwin, Alice Springs, and Katherine despite the thinner rental market. The absence of land tax combined with reasonable yields can produce better after-cost returns than higher-growth mainland cities for yield-focused investors.

Caution: NT property markets are smaller and more volatile. The land tax saving only matters if the underlying investment performs — don't let tax tail wag the investment dog.

Worked Example: $500,000 Land, Investor Individual

The below compares annual land tax for an individual holding a single investment property with $500,000 of taxable land value in 2025-26:

The 10-year estimate assumes land value grows roughly with CPI and rates stay constant. Note that Victoria's COVID Debt Plan and ongoing rate adjustments mean the actual 10-year cost could be higher.

Common Exemptions and Traps

Principal place of residence (PPOR)

Every state (except NT) exempts your PPOR. The exemption ends the moment the property becomes income-producing. Renting out one room through Airbnb can partially remove the exemption in some states. Renting out the whole property always removes it.

Primary production land

Land genuinely used for primary production (farming, viticulture, horticulture) is exempt in most states. Hobby farms and lifestyle blocks often don't qualify — there must be genuine commercial production.

Boarding houses, retirement villages

Some states offer partial or full exemption for properties operated as boarding houses or retirement villages. Check state-specific rules.

Common traps

• Forgetting to notify: you must update the revenue office when you buy, sell, or change use. Back-taxing catches many investors years later.
• PPOR absence: if you move out and rent your home for more than the state's grace period (typically 6 months to 6 years depending on state), land tax applies.
• Trust aggregation: a discretionary trust can lose you the individual threshold entirely.
• Joint ownership: multiple owners are assessed as a single entity with one threshold, not multiple thresholds.
• Foreign surcharge creep: Australian citizens who spend long periods overseas may trigger 'foreign person' status and lose the threshold entirely.

Strategic Decisions

Should I diversify across states?

Yes — land tax is state-siloed, so two properties in different states get two thresholds. A single $1.2m land value in Victoria triggers over $4,000 of tax. Split into $600k in Vic and $600k in Qld, you pay $2,250 in Vic and $0 in QLD. But: transaction costs (stamp duty + selling) usually outweigh the land tax saving unless you're building the portfolio from scratch.

Should I hold in a trust or company?

Generally no for land tax purposes in SA and VIC. Trusts attract far lower thresholds in these states. The asset protection and estate planning benefits of a trust may still outweigh the land tax cost — but run the numbers before assuming a trust is "safer".

Should I avoid the ACT?

The ACT's no-threshold, first-dollar model makes small-to-medium investment properties disproportionately expensive. A $400k Canberra investment property carries annual land tax that approaches or exceeds what the same property in Sydney would cost. Factor this into rental yield calculations.

Should I time PPOR conversions around the assessment date?

Yes — especially in the ACT (quarterly), and when dealing with a state's annual assessment date. Moving into a former rental a few days before the assessment can save a full year's land tax.

Is Land Tax Tax-Deductible?

Yes — for investment properties. Land tax is an allowable deduction against rental income, claimable in the year the liability arises (not the year paid). Combined with loan interest, rates, insurance, management fees, repairs, and depreciation, land tax often contributes meaningfully to negative gearing.

For your principal place of residence, land tax is not deductible (and is exempt in every state anyway).

For commercial property operated through a business, land tax is typically deductible as a business expense rather than against rental income.

Calculate Your Land Tax

Run the numbers for your situation with state-specific calculators:

• NSW land tax calculator
• Victorian land tax calculator
• Queensland land tax calculator
• WA land tax calculator
• SA land tax calculator
• Tasmanian land tax calculator
• ACT land tax calculator

For a full investment property picture including land tax, rental income, loan interest, and depreciation, use our Investment Property Calculator.

Frequently asked questions