The case for holistic financial planning.
What is land tax on an investment property?
Land tax is a state or territory tax on land that meets its tax rules, usually charged each year. It generally uses the assessed land value, without buildings, rather than the full purchase price. Your main home is generally exempt. A rental may be taxed, based on local value limits and rules for who owns it.
Updated
Which property value is used for land tax?
The revenue office generally uses the assessed land value without buildings and other improvements. This differs from the value of the house and land together. The land figure used for tax can be much less than the price the property would sell for.
Local rules set how land is valued and the date used for the tax. This is a yearly tax on ownership. Rent or the mortgage balance does not form the basis of the sum. Revenue office pages explain the current values and threshold, meaning the limit before tax applies.
Why can buying another rental change tax on my existing holdings?
The bill may use the combined value of taxable land held by one owner in that state or territory. Buying more land can change that total. It does not mean each new property gets a separate allowance.
Joint owners, trusts and companies can have different tax rules. A trust is a legal way to hold assets for others. Some types of ownership do not get the normal threshold, and surcharges may apply. A simple tool cannot settle every ownership setup, even if all the homes are normal rentals.
Does living in a property make it exempt in every situation?
A principal place of residence, meaning your main home, is generally exempt if it meets the rules. The revenue office sets conditions about ownership and living there. Mixed use, time away, building work or a trust as owner may need those conditions checked on their own.
The state home exemption has a different test from the federal main residence exemption for CGT, the tax on capital gains. Passing one test does not mean you pass the other. The date used for the bill also matters when you buy, sell or change the property's use during the year.
Illustrative example4 steps
Two rentals form one combined taxable landholding
- Assume one owner holds two non-exempt parcels in the same jurisdiction.
- Assessed land values are $260,000 and $340,000, excluding their buildings.
- Combined land value: $260,000 plus $340,000 = $600,000.
- The relevant ownership rules and current state settings determine any assessment on that total.
For investors
The landholding structure affects a recurring ownership cost.
A rental budget can miss land tax if it looks only at each new purchase. Land already held and who legally owns it matter too. Eligible land tax on property used to earn income can be claimed as a deduction. But the land tax bill and the year of the income tax claim have separate rules. Your accountant or registered tax agent can check both ownership and the right claim year.
Common questions
Questions about land tax
Keep learning
Property is a complex world.
Land tax is one piece of it. Taxes and duties decide what a property really costs to buy and to hold. Next, read about holding costs, stamp duty and positive gearing.
Success stories
Where the numbers shaped the plan.
If you want help
How to choose a buyer's agency.
Four questions to ask any agency, with our answers.
Who pays you?
You do. Never a developer or the selling agent, who works for the vendor.
What is your track record?
Founded in 2018 by Arjun Paliwal, with 3,100+ completed purchases and 850+ five-star Google reviews. REB Buyer's Agency of the Year, winner 2023, 2024 and 2026.
How do you choose a property?
A QPIA-qualified strategist sets the plan. Every shortlisted property passes our 20-point due diligence.
What happens after settlement?
Portfolio reviews, and a Portfolio Wealth Blueprint for what comes next.