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Land Tax: What is it and how is it calculated?
taxes

Land Tax: What is it and how is it calculated?

It's easy to overlook land tax because many people don't know whether the land tax applies to them or not. Every December, New South Wales assesses Land Tax. But, what is land tax? How is it calculated? And what are the thresholds

What You Need To Know about Land Tax

Property investors often misunderstand or forget about land tax, which can result in a lot of trouble. Land tax NSW is applicable to people who own, individually or jointly, a property above the land value threshold. Land tax comes in when a property is not your main residence or not qualified for exemptions. For example, if you have a portfolio of commercial properties. Land tax varies depending on the property's location as it is a state-based tax. 

If the property in question is your principal place of residence, you do not need to worry about land tax liability. Land Tax is not applicable to primary production lands, such as farms or if it falls below the threshold. 

There are land tax relief options available to landlords who reduce tenants' rents. You do not need to pay land tax on your primary residence, and you may receive an exemption for land used for childcare centres, boarding houses, retirement villages, low-cost accommodation, non-profit organisations, and caravan parks. 

You are liable for land tax if you do not qualify for the exemptions listed above. Your land tax liability depends on the unimproved value of the relevant property you own. This is the land's normal market value. 

Land Tax Thresholds 

The majority of companies, individuals, partnerships, and super funds are entitled to the threshold. The threshold is not applied in the case of the majority of Special Trusts. Special Trusts are taxed on the full value of the property. If you own property in several states, such as NSW and Queensland please note the land value is not combined. The property in each state is assessed separately.

New South Wales

Land Tax

Threshold

Calculation

General

$1,075,000

$100, plus 1.6% of the land's value over the general threshold and below the premium threshold.

Premium

In excess of $6,571,000

$88,036 plus 2% of the land's value over the threshold.

If your notice of assessment valued your land at $1,075,000, the threshold is $822,000. You pay land tax on the difference between the two numbers, which is $78,000. At a rate of 1.6%, plus the $100, you would need to pay $1,348 in land tax.

Queensland Tax Bracket

Land Tax

Threshold

Calculation

Individuals

$600,000

$500, plus one cent for every dollar over the threshold. This increases again for lands valued at over $1M dollars.

Companies

$350,000

$1,450 plus 1.7 cents per dollar over the threshold. This increases again for lands valued at over $2.25M dollars.

Queensland's assessment date is 30 June.

Victoria

Land Tax

Threshold

Calculation

General

$50,000 to < $100,000

$500

 

$100,000 to < $300,000

$975

 

$1350, plus 0.3% of value over $300,000, increasing again at $600,000.

$975

On Trust

$25,000

$82, plus 0.375% of value over the threshold, increasing again at $50,000.

Absentee owner surcharge

$50,000

$2500, plus 4% of value over the threshold, increasing again at $100,000.

Victoria's assessment date is 31 December.

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South Australia

Land Tax

Threshold

Calculation

General

$668,000

.50 cents for every $100 over the threshold, rising again at $1,073,000

SA's land tax assessed date is 30 June.

Western Australia

Land Tax

Threshold

Calculation

General

$300,000

$300, increasing at $420,000.

The assessment period falls between October and January.

ACT

Land Tax

Threshold

Calculation

Fixed

All land values

$1,462, regardless of the value.

Valuation Charge

Up to $150,000




0.54% of the AUV of the property

$150,000 to $275,000

$810 plus 0.64% of the part of the AUV that is more than $150,000

From $275,001 to $2,000,000

$1,610 plus 1.12% of the part of the AUV that is more than $275,000

$2,000,000 and higher

$20,930 plus 1.14% of the part of the AUV that is more than $2,000,000

The first of January, April, July, and October.

Tasmania

Land Tax

Threshold

Calculation

General

$100 000 - $499 999.99

$50 plus 0.45% of value above $100 000

$500 000 and above

$1 850.00 plus 1.5% of value above $500 000

The assessment date is 1 July.

There is no land tax in the Northern Territory. 

QuickBook Taxes Can Help 

Contact us to discuss your options as to what QuickBooks Tax Software options are available to you. QuickBooks can aid you in dealing with your land tax online, submitting your tax assessment and keeping detailed records. If you are experiencing difficulties as a result of land tax, please contact a financial advisor for professional advice. 


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