Who Has to Pay Land Tax in NSW?
Quick answer
In NSW, land tax may apply when the combined value of a landholder's taxable NSW land is above the current threshold. Revenue NSW assesses land owned at midnight on 31 December each year, and the tax is charged for the following land tax year.
For 2026, the current general threshold remains $1,075,000. That threshold applies to the combined value of taxable land, not to each property separately. Some owner types, trusts, related companies and foreign owners can be assessed differently.
What Revenue NSW looks at
Revenue NSW uses land values to assess land tax and surcharge land tax. The relevant land value is the unimproved land value, meaning the land itself rather than the total value of buildings and other improvements.
Only taxable land is used to assess ordinary land tax liability. Land that qualifies for an exemption or concession is treated differently. Common exemptions include a principal place of residence and, where the requirements are satisfied, land used for primary production.
The basic liability test
For many individual owners, the first check is simple:
- List all NSW land owned at midnight on 31 December.
- Identify which parcels are taxable and which may be exempt.
- Add the land values of the taxable parcels.
- Compare the combined taxable land value with the relevant threshold.
- Check whether ownership type, trust rules, company rules or surcharge rules change the result.
If the combined taxable value is below the general threshold, ordinary land tax may not be payable for many individual owners. If it is above the threshold, tax is generally charged on the value above the threshold.
Ownership type matters
Revenue NSW explains that land tax and surcharge land tax are calculated differently depending on whether land is owned individually, jointly, through a trust or by a company. This means the same property can produce different land tax outcomes depending on who owns it.
| Owner type | Why it matters |
|---|---|
| Individual owners | Revenue NSW considers the total value of taxable land owned individually and the owner's share of jointly owned land. |
| Joint owners | Jointly owned land has its own assessment process. Each ownership combination can affect how the threshold is applied. |
| Companies | Companies can receive the benefit of the threshold, but related company rules may affect which company receives it. |
| Trusts | Some trusts do not receive the threshold. A special trust, for example, may pay land tax even where the land value is below the ordinary threshold. |
| Foreign owners | Surcharge land tax can apply to foreign persons who own residential land in NSW. It has separate rules and no tax-free threshold. |
Rural land is not automatically exempt
Owning rural, semi-rural or acreage land does not automatically remove land tax exposure. A property can be rural in character and still be taxable if it does not qualify for an exemption.
For properties where a primary production exemption is being considered, the focus should be the actual use of the land. Records can help demonstrate the facts, but they must reflect a genuine productive use rather than an after-the-event label.
When primary production may change the position
Revenue NSW provides guidance for land used for primary production. Activities can include categories such as maintaining animals for sale or bodily produce, keeping bees for honey, cultivation for sale, commercial plant nursery work and certain propagation activities.
Whether an exemption applies depends on the property facts. For landholders, that usually means checking the dominant use of the land, the scale and continuity of activity, competing uses, commercial character where relevant and the evidence available to support the position.
Common situations that need closer review
- several NSW properties that are individually below the threshold but together exceed it;
- land held by a trust, company, related companies or a mix of entities;
- jointly owned land, especially where owners also hold other land separately;
- rural lifestyle blocks with limited or intermittent production activity;
- vacant land, land banking or properties awaiting development approval;
- properties with mixed residential, recreational, rental, tourism or production use; and
- foreign owners or trusts with potential foreign beneficiaries.
Records that can help
Landholders should keep a clear file showing ownership, land values, assessment notices, exemptions claimed, productive land-use areas and supporting evidence. For primary production, useful records may include property maps, livestock or hive records, invoices, photographs, activity logs, contractor records, sales records and annual summaries.
Good records can help demonstrate what happened on the land. Weak records can make it harder to explain the land use, especially if the property has competing residential, recreational or development use.
How Bundilla Beef can help
Bundilla Beef helps NSW rural and semi-rural property owners assess land suitability, plan practical primary production activity, manage agreed operations and maintain records. That work can help demonstrate the factual basis of a primary production position where the property, ownership and activity are suitable.
Bundilla Beef does not provide tax, legal or financial advice and does not guarantee a land tax exemption. Landowners should get advice from their accountant, lawyer or tax adviser before relying on any land tax position.
Source notes
This resource was prepared using official Revenue NSW sources checked on 29 June 2026. Source links should be checked periodically for changes.