Land Tax in Australia: A State-by-State Guide for Property Investors

When it comes to investment properties, taxes are one of the biggest considerations in what you buy, where you buy and when you buy. While taxes are a good thing and they’re part of being an investor, it’s in your interests to not pay unnecessary tax and instead minimise your tax where possible.

So, on that subject, let’s talk about one of the main taxes for property investors: land tax. Australian states have different rates and rules on land tax, and understanding them can be super useful as an investor.

Here, Patrick Leo explains your state-by-state guide on land tax in Australia:

What is land tax?

Land tax is a state and territory government tax in Australia levied on the value of land owned. It’s paid annually by landowners, excluding properties used for the owner’s primary residence or land below a certain value threshold.

Northern Territory

Land tax isn’t levied in the Northern Territory.

Western Australia

Western Australia imposes a general land tax with a max rate of 2.67%. With this comes a Metropolitan Region Improvement Tax Rate of 0.14%, which is levied for properties within the Perth metropolitan area.

South Australia

South Australia levies a general land tax with a max rate of 2.4%. Additionally, there is a Trust Surcharge Land Tax Rate of 2.4%. This is reserved for land owned in trusts where the interests of trust beneficiaries are not disclosed or cannot be identified (excluding listed or widely held trusts).

Victoria

Victoria has a general land tax with a max rate of 2.65%, along with an Absentee Owner (Surcharge) Rate of an additional 4%, and a Vacant Residential Land Tax Rate of an additional 1% for all residential land in Melbourne’s middle and inner suburbs left vacant for more than 6 months in a calendar year.

New South Wales

New South Wales has a general land tax with a max rate of 1.6% over the general threshold of $1,075,000 and up to the premium threshold of $6,571,000. There is a max rate of 2% for high value properties over the premium threshold of $6,571,000. Additionally, there is a surcharge rate of 4% for all residential land owned by foreign persons.

Queensland

Queensland has a general land tax with a max rate of 2.75%, with an additional 2% applied to all taxable land owned by absentee individuals, foreign corporations and trustees of foreign trusts.

Tasmania

Tasmania has a general land tax with a max rate of 1.5%, the lowest in Australia. An additional 2% applies to all residential land owned by foreign persons (other than principal place of residence).

ACT

The ACT has a general land tax with a fixed charge of $1,535 plus valuation charge up to 1.14% on 5 year average unimproved value. It applies to all rateable land that is residential land, not commercial properties. There is an additional surcharge rate of 0.75% for all residential land owned by foreign persons (other than principal place of residence) .

Need extra help navigating these land taxes and making the right investment choices? Patrick Leo’s team of expert property consultants are at your service, assisting you in finding quality property in all states of Australia.