NSW Land Tax 2026: The Threshold Is Frozen
If you own an investment property or a commercial site in NSW, this one is worth checking now. The land tax threshold has not moved.
Land values have moved though. That gap is exactly why more owners are getting caught this year.
The Threshold, in Plain Numbers
For 2026, the general land tax threshold sits at $1,075,000. The premium threshold sits at $6,571,000.
Below the general threshold, you pay nothing. Above it, you pay $100 plus 1.6 percent of the amount over the line.
These figures have been frozen since the 2025 land tax year. They are not adjusted for inflation or rising land values each year.
Why a Frozen Number Still Catches People Out
This is the part many owners miss. Revenue NSW uses a three-year average of your land value, not just this year’s figure.
If your land value has been rising steadily, that average keeps climbing. The threshold does not climb with it.
Owners who were comfortably under the line two years ago can drift over it without buying anything new. Nothing about their situation changed except the rising number on a valuation notice.
How the Assessment Date Works
Land tax is assessed based on what you own at midnight on 31 December each year. This single date decides your liability for the following year.
Settling on a property on 29 December counts for that year’s assessment. Settling just a few days later, on 3 January, pushes liability into the following year entirely.
This timing detail matters more than many owners realize when planning a purchase or sale near year-end.
What Counts, and What Doesn’t
Land tax applies to investment properties, commercial property, and vacant land. It does not apply to your own home.
Your principal place of residence is generally exempt, provided you live in it and meet ownership requirements. One important change applies from 2026 onward. If you are claiming this exemption, you must hold at least 25 percent ownership in the property.
A Detail That Catches Trust-Held Property
If you hold investment property through a discretionary trust, check this carefully. Most discretionary trusts do not receive the standard threshold at all.
This can mean land tax applies from the very first dollar of land value, rather than only above $1,075,000. For a portfolio held this way, the difference is significant.
What To Do Now
Check your current land value notice. Compare it against the frozen threshold, not against what you paid two or three years ago.
Review how your property is held. Individual, company, and trust ownership can all produce very different outcomes.
Time any settlement carefully around 31 December. A few days either side of that date can shift an entire year’s liability.
Confirm your principal residence exemption still qualifies, particularly if your ownership share sits near the new 25 percent rule.
Frequently Asked Questions
Does the threshold increase every year? Not currently. The general and premium thresholds have been frozen since the 2025 land tax year, with no automatic indexation.
Island tax the same as council rates? No. Land tax is a separate state tax based on unimproved land value, assessed by Revenue NSW, not your local council.
Can I claim land tax as a deduction? Generally, yes, if the property is income-producing. It is claimed as a holding cost against rental income in the year it is paid.
Get Your Property Tax Position Reviewed Talk to Edulink
Land tax sits alongside your broader business and investment tax position. A clear, current review avoids surprises.
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