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Guide · Australia

Land tax on Australian investment properties: thresholds, aggregation rules and state-by-state differences

Stamp duty hits once at purchase. Land tax hits every year you hold, aggregated across your properties.

While stamp duty is paid once when you buy an Australian property, land tax is an annual charge on the value of the taxable land you own. Each state runs its own system, and most add together everything you hold in that state, so it can eat into cash flow as a portfolio grows. Here is how land tax works across Australia. Our cash flow calculator includes it in the yearly numbers.

Land value vs property price

Land tax is charged on the value of the land as assessed by the state, not on what you paid for the property. A strata apartment usually carries much less land value than a freestanding house at the same price.

Land you use as your home is generally exempt or outside the tax, though each state sets its own conditions. Investment properties and holiday homes are generally taxable.

The aggregation rule: why portfolios pay more

In most Australian states the scale applies to your total taxable land value in that state, not to each property separately:

  • Two New South Wales properties with land values of $600,000 each are a combined $1,200,000. That is above the $1,075,000 threshold, so land tax is $2,100 a year, even though neither property would pay on its own.
  • Scales are progressive, so a further property is taxed at the rate for the higher slice it falls into. Your earlier land is not retaxed at the new rate.
  • Interstate holdings: thresholds apply state by state, so land in different states is not added together. How much that helps depends on each state's threshold.

Who owns the land matters too. The figures in this guide are for Australian-resident individuals. Trusts and companies can have different thresholds and rates, absentee or foreign owners can pay more, and joint ownership rules vary. In New South Wales, co-owners can claim only one threshold for land owned together, and the threshold does not apply to land in special or discretionary trusts. In Queensland, your share of jointly owned land counts towards your total, and land held as trustee is assessed separately at the rates for companies and trustees. Check the rules for your state before you choose a structure.

State-by-state thresholds and quirks

The main differences across Australia, each with a full table on its state page:

  • New South Wales: general threshold $1,075,000, frozen from the 2025 land tax year, using a 3-year average of land values. A premium rate of 2% applies above $6,571,000.
  • Victoria: tax starts at $50,000 of site value, with flat amounts of $500 and $975 in the lowest bands and rates up to 2.65% above that.
  • Queensland: individuals are liable from $600,000 of total taxable value at midnight on 30 June.
  • Western Australia: land tax starts above $300,000. Perth metropolitan land also pays the Metropolitan Region Improvement Tax of 0.14% above $300,000.
  • South Australia: thresholds are adjusted each year based on changes in site values and published in the Government Gazette. The 2026–27 general threshold is $936,000.
  • Tasmania: tax starts at $125,000 of assessed land value.
  • Australian Capital Territory: holdings are not aggregated. Each rented property pays a fixed charge ($1,778) plus a valuation charge on an average of up to 5 years of value, with no tax-free threshold.
  • Northern Territory: the Territory lists no land tax among its revenues.

Deductibility against rental income

Land tax on a rental property is generally deductible as an outgoing incurred in producing assessable income, under s.8-1 ITAA 1997, and the ATO lists it among the rental expenses you may be able to claim immediately. You claim it for the income year the liability relates to, even if the assessment arrives later. It reduces your taxable rent, or adds to a rental loss. For properties caught by the negative gearing changes, that loss may be quarantined rather than used against other income.

Vacant land is different. Deductions for the costs of holding vacant land, including land tax, are only available in certain circumstances. Land held by a company is one of the exceptions.

Questions landlords ask

Is land tax based on the purchase price or the land value?

The land value assessed by the state, not the price you paid.

Is land tax tax-deductible in Australia?

Generally yes, for land held to produce rental income, where it is a running cost of the rental. Land tax on vacant land is deductible only in certain circumstances.

How does owning property in multiple states affect land tax?

Each state assesses its own land, so holdings in different states are not added together.

Does my home count towards land tax?

Generally no, if you use it as your home, but the conditions vary by state, so check your revenue office's rules.

Tax rules: AU registry v1.1.0, last reviewed 2026-09-30. Sources and method.