How NSW Land Tax Is Calculated
Quick summary
Revenue NSW calculates land tax using the combined value of taxable NSW land owned at midnight on 31 December each year. For most individual landowners, the calculation starts with the average unimproved land value of non-exempt land, compares that value with the current threshold, and then applies the relevant rate.
The calculation can change when land value changes, when ownership changes, when a property becomes exempt or non-exempt, or when a landowner has several taxable properties that are assessed together. Rural and semi-rural owners should treat the calculation and any primary production exemption question as separate checks.
The basic calculation
For general NSW land tax, the broad sequence is:
- Identify all NSW land owned at midnight on 31 December.
- Remove land that is exempt, such as a principal place of residence or land that qualifies for a primary production exemption.
- Use the Valuer General's unimproved land values for the remaining taxable land.
- Apply Revenue NSW's three-year average land value method where it applies.
- Compare the combined taxable land value with the current threshold.
- Apply the relevant general or premium rate.
What land value means
Land tax is based on unimproved land value, not the full market value of the property with buildings, dwellings, sheds, fencing or other improvements included. Revenue NSW uses land values provided annually by the NSW Valuer General.
The NSW Government explains that the Valuer General is the independent statutory officer responsible for setting and overseeing land values in NSW. Landowners can search land values through the NSW land value search tools using a property number, title reference or address, depending on the search method available.
The three-year average
Revenue NSW explains land tax using a three-year average of land values. For example, if the relevant land values are $1,050,000, $1,100,000 and $1,150,000, the average land value for the 2026 tax year is $1,100,000.
If a parcel has existed for less than three years, such as after a subdivision or amalgamation, Revenue NSW only considers the years after the parcel was created.
Current thresholds and rates
Revenue NSW states that NSW land tax thresholds were fixed from 1 January 2025. As at 29 June 2026, the current general threshold is $1,075,000 and the premium threshold is $6,571,000.
| Band | When it applies | General calculation |
|---|---|---|
| Below general threshold | Combined taxable land value is at or below $1,075,000 | No general land tax payable, subject to owner type and surcharge rules. |
| General threshold | Combined taxable land value is above $1,075,000 and below the premium threshold | $100 plus 1.6% of the value above $1,075,000. |
| Premium threshold | Combined taxable land value is above $6,571,000 | Premium rates apply above the premium threshold. |
Some owners, companies, trusts, related companies and foreign persons may be assessed differently. Surcharge land tax has separate rules and no tax-free threshold for foreign persons who own residential land in NSW.
Worked example
Assume a landowner has one non-exempt NSW property and the three-year average unimproved land value for land tax purposes is $1,100,000.
| Average land value | $1,100,000 |
|---|---|
| Less current general threshold | $1,075,000 |
| Taxable value above threshold | $25,000 |
| General rate calculation | $25,000 x 1.6% + $100 |
| Estimated land tax liability | $500 |
This is a simplified example. The actual assessment depends on ownership type, all taxable NSW holdings, exemptions, concessions, surcharge rules and Revenue NSW's assessment process.
Why rural owners should check exemptions separately
Revenue NSW only uses taxable land to calculate the liability. Land that qualifies for a primary production exemption may be removed from the taxable land calculation, but the exemption depends on the property facts.
For rural and semi-rural landholders, the important question is whether the land is used dominantly for primary production. That assessment can involve the actual area used, the activity carried out, continuity, commercial purpose or character where relevant, competing uses, and the records available to show what is happening on the land.
Primary production records do not create an exemption by themselves. They can help demonstrate the land-use facts if there is a genuine productive use already occurring.
Records that can help explain the calculation
Useful records may include:
- land tax assessment notices and Revenue NSW correspondence;
- current and historical land value searches or certificates;
- a list of all NSW landholdings and ownership interests;
- notes showing which land is claimed as exempt, taxable or partly exempt;
- property maps showing productive and non-productive use areas;
- activity logs, photographs, invoices, livestock or production records; and
- annual summaries prepared for an accountant, lawyer or Revenue NSW review.
How Bundilla Beef can help
Bundilla Beef helps NSW rural and semi-rural property owners assess property suitability, plan practical primary production activity, manage agreed land-use work and keep operating records. That work may help support a primary production position where the actual facts of the property, activity and ownership are consistent with the exemption requirements.
Bundilla Beef does not provide tax, legal or financial advice and does not guarantee a land tax exemption. Landowners should obtain advice from their accountant, lawyer or tax adviser before relying on any land tax position.
Source notes
This resource was prepared using official NSW sources checked on 29 June 2026. Source links should be checked periodically for changes.