State-based land tax estimate.
Annual land tax
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A state tax, not a federal one
Land tax is one of the few property taxes that has nothing to do with the ATO. Each state and territory levies its own land tax on the unimproved value of land you own, with its own threshold, its own rates, and its own exemptions. The value taxed is the land alone, set by the state valuer general, not the house sitting on it and not what you paid. This calculator estimates the annual bill for a chosen state, applying that state's tax free threshold before charging tax on the value above it.
The most important exemption almost everywhere is your principal place of residence. The home you actually live in is generally exempt, which is why land tax is overwhelmingly a tax on investment property, holiday homes, and vacant land. If the only property you own is the one you live in, you usually pay nothing.
Thresholds swing wildly between states
The state you invest in matters enormously, because the thresholds are not remotely similar. New South Wales starts taxing land value above roughly $1.075 million, while Victoria and Western Australia bite from a few hundred thousand. The table inside the tool lists the approximate thresholds used. An investor with the same land value can owe nothing in one state and thousands in another, purely because of where the dirt sits.
A $1.2 million NSW landholding
Take the defaults: $1.2 million of taxable land value in New South Wales, where the approximate threshold is $1.075 million. Only the value above the threshold is taxed, plus a fixed base amount. The calculation runs as follows.
| Step | Amount |
|---|
So roughly $2,100 a year, levied only on the $125,000 sitting above the threshold. Be clear about what this is: a simplified single rate estimate. Real state land tax uses progressive bands, premium rates on very large holdings, and surcharges for foreign owners, so your actual notice can differ. Treat this as a planning ballpark and check the precise bands with the relevant state revenue office.
Aggregation, the trap investors forget
Here is the rule that quietly catches portfolio builders. Within a state, the revenue office aggregates the value of all your taxable land and applies the threshold once, to the combined total. Buying three smaller investment properties does not give you three separate thresholds, it gives you one threshold across the lot. A common mistake is assuming several modest properties each slip under the threshold, when in fact their values are added together and the whole portfolio is taxed. My tip: investors often hold property across different states, or through separate legal owners such as a spouse or a trust, partly because each owner in each state gets its own threshold, though trust holdings can attract their own surcharge rates, so take advice before structuring around it.
Foreign owner and trust surcharges
This estimate covers the ordinary land tax, but several states stack extra charges on top that the simplified figure does not show. Foreign owners face an absentee or foreign owner surcharge in states such as New South Wales and Victoria, often a percentage point or more of the land value each year, which can dwarf the base tax. Land held in a discretionary trust can also lose access to the normal threshold or attract a higher surcharge rate, because the state cannot easily identify the underlying owner. If you are a non resident or you are buying through a trust, treat the calculator's number as a floor and get specific advice from the state revenue office, since these surcharges can change the economics of an investment entirely.
Is land tax deductible against my rental income?
Yes. Land tax on an income producing investment property is generally deductible against the rent in your income tax return, so the ATO effectively shares part of the cost at your marginal rate. It is not deductible on a property you do not rent out, such as vacant land held purely for future personal use or a holiday home you keep empty.
Why is land tax based on land value, not the sale price?
Because the tax targets the land itself, the state values the unimproved site as if the buildings were not there, using the valuer general's assessment. That means two identical houses can attract different land tax if one sits on a larger or more valuable block, and a high rise apartment often carries a small land value because the underlying land is shared across many units.