NSW Land Tax Rates: General Overview of How Bands Work

How NSW Land Tax Rate Bands Work, in General Terms

NSW land tax is generally calculated by applying percentage rates (or cents-per-dollar rates) to the taxable value of your land, once your aggregated land value is above certain thresholds. Broadly, there are:

• A general land tax band, applying above the general threshold; and
• A premium land tax band, applying once your total taxable land value exceeds a higher premium threshold.

Each band has its own rate and a fixed dollar amount (base amount) that forms part of the calculation once the relevant threshold is crossed. This is similar to how some income tax rate scales work, but it applies to land values instead of income.

General vs Premium NSW Land Tax Rates

Although the exact numbers change over time, the structure often looks conceptually like this:

1. General land tax band ? where total taxable land value is above the general threshold but below the premium threshold:

Land tax = base amount + (taxable value ? general threshold) ? general rate

2. Premium land tax band ? where total taxable land value exceeds the premium threshold:

Land tax = premium base amount + (taxable value ? premium threshold) ? premium rate

The general rate and premium rate are usually expressed as cents per dollar of taxable land value above the relevant threshold. Only Revenue NSW can confirm the current thresholds, rates and base amounts for each year.

Illustrative NSW Land Tax Rate Example (Not Real Figures)

The following is a simplified, hypothetical example only. It does not use real numbers and should not be relied on for any actual calculation.

Imagine a situation where, for a particular year:

• The general threshold is $600,000 (illustrative only)
• The premium threshold is $2,000,000 (illustrative only)
• The general rate is 1.6% with a small base amount
• The premium rate is higher (for example, 2% with a higher base)

If your total taxable land value was $1,000,000 in this example, you would be in the general band and pay land tax at the general rate on the amount above $600,000, plus the relevant base amount.

If your taxable land value was $3,000,000, your land tax would be calculated using the premium band formula, where the rate applies to the amount above the premium threshold, plus the premium base amount. Actual NSW figures and any rounding rules are set and applied by Revenue NSW each year.

How Thresholds and Aggregation Interact with Rates

NSW land tax rates do not operate in isolation. They interact with the thresholds and aggregation rules to determine how much land tax you pay. In general:

• The unimproved values of all your taxable NSW properties are usually added together (aggregated).
• The total is compared against the general and premium thresholds.
• The land tax rate band that applies (general or premium) depends on where this total sits relative to the thresholds.

For more about the thresholds themselves, you can read:

? NSW Land Tax Thresholds ? general explanation of thresholds and aggregation
? Land Tax in NSW ? Overview ? broader context on how land tax fits into property ownership

Why NSW Land Tax Rate Bands Matter for Planning

Understanding how rate bands work at a high level can help you and your advisers:

• Anticipate how land tax might change as you acquire additional NSW properties
• Identify when you might move from paying no land tax to paying at the general rate
• Recognise when your total land value is approaching the premium band, which can materially impact holding costs

Any detailed modelling of land tax should be carried out with your accountant or tax adviser, using current thresholds and rates as published by Revenue NSW, and taking into account your ownership structure and exemptions.

Using NSW Land Tax Calculators and Official Tables

Some NSW land tax information is presented in published tables, while in other years Revenue NSW may make available online calculators or examples. These tools can help you understand how the rate bands apply to specific land values for a given year.

When using any such tool, it is important to:

• Confirm the tax year the figures relate to
• Ensure you are entering the correct taxable land value (usually the unimproved value, not the overall property price)
• Confirm with your accountant or tax adviser whether any exemptions, surcharges or special rules apply to your situation

Our general guide to property calculators in Australia outlines a broader framework for using calculators as part of your property research, rather than as standalone decision-making tools.

How a Buyers Agent Fits In with NSW Land Tax Rate Considerations

A buyers agent does not set land tax rates or provide tax advice. However, a buyers agent in Sydney can work alongside your accountant and financial adviser by:

• Helping you identify properties with different land components and price points
• Coordinating information so your advisers can estimate land tax and other holding costs on specific options
• Assisting with negotiations and due diligence once you are comfortable with the financial modelling prepared by your professional advisers

Our Working with a Buyers Agent and property buyer checklist resources provide additional structure for coordinating the practical search process with tax and financial advice.