What is Land Tax in NSW?

House on land depicting taxLand Tax is a tax levied on owners of land in NSW as at midnight on 31 December each year. Each owner is assessed based on the sum of unimproved values for all land held by that person at that moment. The following points are relevant:

• Unimproved values are as assessed by the Valuer General on 1 July in the preceding year,

• If you hold land jointly with another person then, only the share of that land owned by you is included in your assessment,

• Some land is exempt from the assessed sum, including:
o Your principal place of residence (but not if it is held by a corporation or trust),
o Farmland used for primary production
o Land used for low cost boarding houses
o Retirement Villages
o Residential Parks including Caravan Parks
o Aboriginal Land Council land
o Land used as a Child Care Centre

• There is a land tax threshold such that no land tax is payable until your assessed sum is greater than the threshold. For the 2017 year, the land tax threshold is $549,000.00,

• The amount of land tax payable will be calculated as 1.6% of the assessed sum greater than the threshold amount plus $100.00.

Land Tax is an issue to be dealt with in every conveyance of land in NSW:

• From the Vendor’s perspective, the onus is on you to disclose to the purchaser whether there is a land tax charge on the land and then it will be your obligation to clear the charge (if any) before the sale is completed.

• From the Purchaser’s perspective, you will need to ensure that the Vendor clears the land tax charge (if any) as it is a charge that goes with the land, if it is not dealt with.

If you need further assistance or have queries about your obligations in relation to land tax, please contact All About Conveyancing – conveyancing you can trust.

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