In recent years, we’ve seen a steep increase in property values. This is a cause of headache for many Australian property investors, especially that tax dates for certain states are forthcoming.
In this short guide, Amby Buyers Agency provides you information about land tax rates and thresholds between each state, as well as other relevant details of your land tax obligations. Better to be well-informed, lest you’ll be shocked by a terrifyingly high tax bill.
What is land tax?
A land tax is calculated based on the accumulative value of all unimproved land one owns, other than his place of residence in any state. In Australia, land tax is computed and collected either annually or quarterly if you live in the Australian Capital Territory (ACT). Because land tax is just about tax on the land value, many investors choose to buy units with relatively little land value, thereby minimising payments each tax season.
How much you pay for land tax is determined by your council. Different councils might have different rates, valuation methods, and timing for tax payments. Your land tax is then apportioned to cover a range of community services like infrastructure (roads, bridges, parks and gardens), health and safety (immunisation, pest eradication), and other administrative projects like libraries, community activities, tree planting, etc.
If you own a property or two, land taxes often aren’t a pain in one’s neck. But if you’re a large property investor with a portfolio that spans several states and territories, the amount you will have to pay each year in land taxes may balloon prohibitively.
Before July 1, 2022, the Property Activation Levy allowed property investors with units in the Northern Territory not to pay any land tax at all. But all states and territory governments in Australia impose a land tax.
Land tax matrix for all Australian States and Territories
For more in-depth details about land tax assessments, responsibilities, qualifications, and exemptions, click each state on the matrix below:
| STATE | GENERAL LAND TAX RATE | SURCHARGE LAND TAX RATE | TAX DATE | OTHER RATES |
| Western Australia | 2.67% (max rate) | (not imposed) | Midnight of June 30 every year | Metropolitan region improvement tax rate (0.14%) |
| Queensland | 2.75% (max rate) | 2% (applicable to all taxable land owned by absentee individuals, foreign corporations, and trustees of foreign trusts) | Midnight of June 30 every year | |
| New South Wales | 1.6% – 2% | 4% (additional tax for residential land owned by foreign persons) | Midnight of June 30 every year | |
| South Australia | 2.4% (max rate) | 2.4% (applicable to land owned in trusts where interests of trust beneficiaries aren’t disclosed) | Midnight of June 30 every year | |
| Victoria | 2.55% (max rate) | 2% (additional rate applicable to land owned by absentee owners) | Midnight of December 31 every year | Vacant residential land tax rate (1%) |
| Tasmania | 1.5% (max rate) | 2% (additional rate applicable to residential land owned by foreign persons, except the principal place of residence) | Midnight of July 1 every year | |
| ACT | 1.14% | Midnight of July 1, October 1, January 1, and April 1 every year | Council rates (fixed charge of $3,004 plus valuation charges of up to 5.6638% on 5 year average of unimproved land) | |
| Northern Territory | The Property Activation Levy ended in July 2022 but land owners are required to lodge and pay returns for the 2021-2022 period. | |||