NSW Land Tax 2026: Investors, Thresholds, Premium Rates and Examples

The NSW land tax question investors should ask first

The first question is not what the property is worth.

For NSW land tax, the better question is: what is the combined unimproved land value of all your taxable NSW land?

Land tax is assessed on the land value, not the full property value. Buildings are excluded. Revenue NSW uses land values from the NSW Valuer General and calculates liability using a 3-year average.

2026 NSW thresholds

Revenue NSW lists the 2026 land tax thresholds as:

The 2024-2025 NSW Budget froze the general and premium thresholds for land tax years after 2024.

The general rate is $100 plus 1.6% of land value above $1,075,000 and below the premium threshold. The premium rate is $88,036 plus 2% of land value above $6,571,000.

What land is usually exempt?

Generally, you do not pay NSW land tax on:

• Your principal place of residence.
• Primary production land that qualifies for exemption.
• Taxable land below the relevant threshold.

Investment properties, holiday homes, commercial property and vacant land can be taxable.

Worked example: one investment property

Assume an investor owns a NSW investment property with a 3-year average land value of $1,250,000.

Calculation:

• Average land value: $1,250,000.
• General threshold: $1,075,000.
• Taxable amount above threshold: $175,000.
• Variable component: 1.6% x $175,000 = $2,800.
• Base amount: $100.
• Estimated land tax: $2,900.

That estimate assumes the owner receives the general threshold and is not subject to surcharge land tax or trust rules.

Why the 3-year average matters

NSW does not simply use one year's land value in isolation. Revenue NSW calculates land tax by comparing the 3-year average of your land value against the threshold.

That can smooth sharp valuation increases, but it can also mean a previous high value stays in the calculation for a period.

When reviewing an assessment notice, check the land values used for each year, not just the final assessment number.

Trusts can change the threshold

Revenue NSW warns that the tax-free threshold does not apply to land owned as part of special or discretionary trusts.

This is where investors often get caught. A family trust can make sense for non-tax reasons, but the land tax outcome may be worse than individual ownership.

Before using a trust to buy NSW property, ask for a land tax comparison in writing.

Surcharge land tax is separate

Foreign owners may also face surcharge land tax. Revenue NSW treats surcharge land tax separately from ordinary land tax, and the ordinary thresholds do not apply to surcharge land tax.

If any owner or trust beneficiary may be foreign for NSW purposes, get specific advice before buying.

What to do before buying

1. Search the current land value.
2. Add any other taxable NSW land you own.
3. Check whether your owner type receives the threshold.
4. Check trust and foreign owner exposure.
5. Ask your conveyancer about settlement land tax adjustments.
6. Model yield after land tax.

Use the NSW Land Tax Calculator, then test the cash-flow impact in the Investment Property Yield Calculator.

Bottom line

NSW land tax is less aggressive than Victoria at lower land values, but it becomes material once taxable holdings move above the $1,075,000 threshold.

For investors with multiple properties, the combined land value matters more than the value of any single property.

Sources: Revenue NSW land tax thresholds and rates, Revenue NSW 2026 land tax year guidance and Revenue NSW land tax overview pages. This article is general information, not tax, legal or financial advice.