What Is Land Tax and Who Is Required to Pay It in Australia?
Land tax is an annual state tax on land value above a tax-free threshold. Here's who pays it, how thresholds differ by state, and what's exempt.
What is land tax?
Land tax is an annual tax that state and territory governments charge on the value of land you own, separate from anything built on it. There’s no federal land tax and no single national scheme — each state and territory runs its own regime, with its own tax-free threshold, its own rate scale and its own revenue office that assesses and bills it. If you own investment property, a holiday home, vacant land or commercial land, it’s that state’s revenue office that handles your land tax — not the Australian Taxation Office.
It’s worth separating land tax from stamp duty, since the two are often confused. Stamp duty is a one-off tax you generally pay once, within about 30 days of settlement, when you buy property. Land tax is different: it’s an ongoing annual charge assessed on land you continue to hold, for as long as you hold it above the threshold.
Most states measure land tax against the combined (“aggregated”) taxable value of all the land you own in that state, rather than assessing each property on its own — so owning several investment properties in one state adds their land values together before the threshold is applied.
Who is required to pay land tax?
Broadly, land tax is payable by the owner of land held above a state’s tax-free threshold — in practice, this usually means investors holding rental property, vacant land, or a holiday home. A genuine principal place of residence — your main home — is generally exempt from ordinary land tax in every jurisdiction covered below, though exactly how each state defines and tests that exemption differs from state to state. If you’re unsure whether your home qualifies, your own state or territory revenue office is the authority to check with.
Liability isn’t limited to individuals. Companies, trusts and self-managed super funds can all be liable for land tax on property they own, and in some states the threshold — or even the rate — changes depending on which of these structures holds the land. In Victoria, for example, the general threshold for individuals is $50,000 of taxable land value, but a separate, lower $25,000 threshold applies to the trust surcharge.
In Queensland, companies and trustees sit on a different (and lower) threshold than the $600,000 figure that applies to individuals. How you hold an investment property carries tax consequences that go well beyond land tax alone, so it’s worth thinking through before you buy, not after.
Timing also varies by state. In Queensland, for instance, liability is assessed on whoever owns the land at midnight on 30 June each year — other states set their own assessment dates, so check your own revenue office rather than assuming one state’s timing applies everywhere.
Tax outcomes depend on your circumstances — speak with a registered tax agent before acting.
How land tax thresholds differ by state (as at July 2026)
Land tax is entirely state and territory-set — there’s no single comparison page that covers all of them, and each row below has its own citation because it comes from that jurisdiction’s own revenue office. Treat every figure as current only as at July 2026: thresholds and surcharges move with state budgets, sometimes more than once in a few years.
| State/territory | Tax-free threshold (individuals, general) | What else to know |
|---|---|---|
| Victoria | $50,000 of taxable land value | A lower $25,000 threshold triggers the separate trust surcharge; a temporary COVID-debt land tax surcharge is layered on top of ordinary rates, legislated to apply until 30 June 2033 |
| New South Wales | $1,075,000 of combined taxable land value | Frozen under the 2024-25 NSW Budget rather than indexed annually as it historically was; a progressive scale applies above the threshold up to a premium threshold |
| Queensland | $600,000 of total taxable land value (individuals) | Companies and trustees sit on a separate, lower threshold — check the Queensland Revenue Office’s own calculator rather than reusing the individual figure |
| Western Australia | $300,000 of aggregated taxable land value | Perth-metropolitan owners may also owe a separate Metropolitan Region Improvement Tax on the value above $300,000 |
| Tasmania | $125,000 of assessed land value | This threshold has applied since 1 July 2024 |
| Australian Capital Territory | No tax-free threshold at all | A fixed charge of $1,778 plus a marginal rate on the property’s Average Unimproved Value applies instead, effective 1 July 2026 |
| South Australia | $936,000 of total taxable site value (2026-27 land tax year) | A separate, lower $25,000 threshold applies under the trust scale; both figures are indexed annually by gazette, so they move most years |
| Northern Territory | No land tax | The NT Government’s own site states this directly: stamp duty applies to property transfers instead, but there is no ongoing land tax |
A structural note on the ACT: because it charges a fixed amount plus a value-based scale rather than a threshold-and-rate model, it doesn’t really have a “$0 threshold” — it’s simply a different kind of calculation, not a stricter or looser version of the threshold states.
Sources: State Revenue Office Victoria, Revenue NSW, Queensland Revenue Office, WA Department of Treasury and Finance, State Revenue Office Tasmania, the ACT Revenue Office, RevenueSA, and the Northern Territory Government.
Surcharges that sit on top of ordinary land tax
A few extra charges layer on top of the ordinary threshold-and-scale land tax above, rather than replacing it:
- Foreign or absentee ownership surcharges. Several states charge foreign purchasers an additional duty when they buy (a one-off cost, not land tax itself), and the ACT separately imposes an ongoing foreign-ownership land tax surcharge of 0.75% of a property’s Average Unimproved Value each year. Rules and rates differ by state — check the relevant revenue office if this could apply to you.
- Victoria’s Vacant Residential Land Tax (VRLT). This is an additional annual Victorian tax — with no tax-free threshold of its own — on residential land that sits vacant (not genuinely used or occupied, or under a genuine lease) for more than six months in the preceding calendar year. It’s assessed separately from, and on top of, Victoria’s ordinary land tax, and exemptions exist for things like genuine holiday-home use, active renovation, and properties that changed hands during the year. Because VRLT’s scope has been extended more than once in recent years, check the State Revenue Office Victoria’s current pages before assuming last year’s rules or exemptions still apply.
Land tax as a cost of holding an investment property
Land tax is one of the ongoing costs — alongside things like insurance, rates and property management fees — that sits between an investment property’s rental income and what actually reaches the owner. How much it adds to your holding costs depends on your state, your ownership structure, and the value of the land itself, so it’s worth factoring into your own numbers before you buy rather than after. Our guide to cash flow positive property vs negatively geared property walks through how ongoing costs like this weigh against rental income more broadly, and our guide to property investment in Australia covers how land tax fits into the wider cost picture of holding a rental property.
Because land tax outcomes depend on the state, the ownership structure and your own circumstances, a registered tax agent is the right person to work out what you’d actually owe.
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