NSW Land Tax for Discretionary Trusts in 2026

The threshold is the key issue

In NSW, the tax-free threshold can be unavailable for land held by special or discretionary trusts. This is why the same property can have a very different land tax outcome depending on whether it is owned personally or through a trust.

Investors often focus on asset protection and distribution flexibility. Those are legitimate reasons to discuss a trust, but the annual land tax cost should be part of the same decision.

Example

An individual owner with land value below the general threshold may have no ordinary NSW land tax. If the same land is held in a discretionary trust without threshold access, land tax may apply from the first dollar under the special trust treatment.

That gap can change the net yield and cash-flow profile.

Use the NSW Land Tax Calculator to test the property, then compare the result with the Negative Gearing Calculator.

What to ask before signing

• Does this trust receive the NSW threshold?
• Is it a special trust, fixed trust or unit trust?
• Are there foreign person or surcharge land tax issues?
• How does the annual bill affect net yield?

Sources: Revenue NSW land tax and trust guidance. General information only.