Frequent questions
General
- What is land tax?
Land tax is an annual tax on the total land value of all taxable land owned in NSW. You are assessed on all land held as at midnight 31 December the previous year eg 2013 is based on all land held at as 31 December 2012.
- Do I have to pay land tax on my principal place of residence?
Your principal place of residence is generally exempt from land tax. For more information on the eligibility criteria, view the principal place of residence exemption.
- Who is considered to be a land owner for land tax purposes?
An owner includes:
a sole owner
joint owners
a company (includes a company in an approved shared equity scheme)
a trustee of any trust
a beneficiary of a trust
a shareholder in a home unit company
unit holders with interests in unit trusts
trustees of a superannuation fund
a society or organisation whose land is not exempt from land tax
any person deemed to be an owner by the land tax legislation including a person who leases land from the Crown or from a Local Council.
- How is land tax calculated?
Use OSR's land tax calculator to estimate your land tax liability or read more information on land tax rates.
- Do I have to pay land tax on a property that isn't earning any income?
Yes, if your property is not exempt from land tax it will be subject to land tax, even if it is not producing any income (eg a holiday home, a hobby farm or vacant land).
- Do I have to pay land tax on properties outside of NSW?
You do not have to pay NSW land tax on land located outside of NSW, but all other states and territories except the Northern Territory impose land tax. Read more information on land tax in other states by selecting the links below:
- If I sell land partway through a year, do I get a refund of part of the tax paid?
No, but the contract for the sale of your land may allow you to recover a proportion of the land tax you paid from the purchaser. However, this is a matter for you to negotiate with the purchaser prior to signing a contract to sell the land.
- Do I have to pay land tax if, on 31 December I am in the process of selling my principal place of residence but I have already purchased a new residence?
You may be able to claim an exemption on both properties as long as one residence is or was your principal place of residence and the newly purchased residence is or will be your principal place of residence. Read more information on selling your former principal place of residence.
- Do I have to pay land tax on my newly constructed residence if it is not ready for occupancy until after 31 December?
If you buy land with the intention of building your principal place of residence, you can claim an exemption for 4 tax years after the date of purchase if you do not own and occupy an existing residence. Read more information on land intended as your principal place of residence. Prior to 2011, the exemption was generally for 2 tax years.
- Do I receive a rebate if my land is rented at 31 December and I occupy it as my principal place of residence after this?
No, if the property is leased on the taxing date (midnight on 31 December prior to each calendar year) then you are liable for the full amount of land tax for that year.
- Am I liable for a previous owner's unpaid tax?
If you purchase a house or land, or provide finance to a purchaser which is secured by a mortgage, you may be liable for any land tax owing on the property unless you first obtain a land tax certificate and the certificate shows that no land tax is payable. To check whether any land tax is owing, you should apply for a land tax clearance certificate before you complete your purchase or financing arrangements. The purpose of the clearance certificate is to protect the purchaser from any land tax that may be outstanding on the land item being purchased.
- Does GST apply to land tax?
No, your land tax payment is exempt from GST.
- How does the threshold work if I own several land items?
If you own several land items, the value of all your liable land will be added together. You will then be charged land tax on the combined land value above the land tax threshold.
- What happens if my land ownership changes?
If you purchase additional land or if you sell land, you will need to notify us. You can notify us by using the Online Services, download a form, or call us.
Note: any land ownership changes that occur within a tax year will not change your tax liability for that year - they will only affect your liability for the next year. Read more information on If I sell land partway through a year, do I get a refund of part of the tax paid?
- I received a land tax assessment in 2005 but have not received an assessment in any other year. Why is this?
In the 2005 tax year, the land tax threshold was abolished and a progressive tax rates scale introduced. For years prior and subsequent to 2005 there is a land tax threshold. This means if the combined land value of your taxable land was under this threshold you are not liable to pay land tax.
- What happens if I do not pay my 2013 land tax bill?
If you do not pay your land tax assessment for 2013 you will be in default, and you may be charged interest or penalties on the amount owing.
- How will I know if I am liable in 2013?
If you are registered for land tax in 2013, OSR will check your records in 2013 to determine whether you are liable or not. You do not need to contact us or use land tax online services unless your land ownership details change during 2013. If you are liable, we will send you a 2013 land tax assessment.
- How will land tax be calculated in 2013?
Your land tax liability (if any) for 2013 will be calculated based on the liable land you own at midnight on 31 December 2012. Read more information about land tax rates and thresholds.
- What is the land tax premium threshold?
The premium threshold for 2013 is $2,482,000. Where a client’s total taxable land value is above this amount, land tax will be charged at the rate of 1.6% from the general threshold up to the premium threshold, and then 2% thereafter.
Registering for land tax
- How can I register for land tax?
You can register for land tax online, or contact us by phone during business hours and register over the phone. You can also download and complete a hardcopy registration (initial return) form and return this to us.
- How can I check whether OSR has my correct land tax details?
You can now check and update your details online. You can also contact us and update your details over the phone or download and complete a hardcopy variation return form and send this to us.
- When do I have to submit a land tax registration?
If you are liable for land tax for the first time you will need to register by 31 March 2013. If you registered or received an assessment for the previous year, you do not need to submit another one unless you have bought or sold land or the liability of your existing land holdings has changed since you submitted your registration.
To update your land holding or your contact details, use Land tax online services.
- How do I know if I am registered for land tax?
If you are not sure if you are already registered for land tax you can contact us. If you have previously received a notice of assessment for land tax we will still have your details on file. You can check whether your details are up-to-date online, or by contacting us.
- How many registrations do I need to submit if I own land in various partnerships?
If you own land in several partnerships, you will need to submit a separate registration for each partnership, disclosing the land owned by each partnership. For example, if A and B jointly own land they must submit one form in both names. If A and B own a property with C, a separate registration must be submitted by A, B and C.
The notice of assessment
- When will I receive a notice of assessment?
If you are a new land tax client in 2013, you will be registered as an OSR client following the submission of your land tax registration form. OSR will generally issue both new and existing land tax clients with a notice of assessment stating your land tax liability in the first half of 2013.
If your account is overdue and you have misplaced your notice of assessment, please contact debt collection and payment arrangements.
- What do I do if the information on my notice of assessment is incorrect?
If information on your notice of assessment relating to your property or properties is incorrect, you should notify us of your correct details using our land tax online services or contact us. You can also use the land tax online services if you need to update your contact details (eg address, phone number and email address).
You should advise us of any changes by the first instalment date listed on your notice of assessment, or, if it is a 'nil' assessment, within 40 days of the date shown on the notice of assessment.
- What period does my notice of assessment cover?
The land tax period is based on a calendar year, and is called a 'tax year'. Your notice of assessment will include all property you own at midnight on 31 December of the year prior to each tax year.
For example, for the 2013 land tax year, your land tax notice of assessment will be based on the total taxable value of land you own; that is above the land tax threshold at midnight on 31 December 2012
- Why have I received a notice of assessment for multiple years?
If you have owned taxable land for several years but have not previously been registered and paid land tax on these properties, you will receive an assessment that may go back to the date the land item/s became liable for land tax.
- How am I assessed if I own some land individually and some land with other owners?
You are first assessed on the land you jointly own (together with other owners). You will then be assessed individually on the total land value of all your interests in land, whether you own them as an individual or as a joint owner. For example, if you have a 50% interest in the jointly owned land, your individual assessment will include 50% of the value of that land plus 100% of any land you own individually.
To make sure you do not pay tax twice on the jointly owned land, your individual assessment will show a deduction of a proportion of the tax on the jointly owned land, to prevent double taxation.
- Why does my land appear on more than one assessment - am I being taxed twice?
If you have been individually assessed on your share of jointly owned land which has also been included in another assessment, your individual assessment will include a deduction in tax payable to prevent double taxation.
The calculations used to determine the deduction will be shown on the support schedule attached to your notice of assessment.
- Why have I received a reassessment?
You may have received a reassessment notice because:
you have updated your land tax ownership details
the exemption status of your land may have changed
there have been changes to the percentage of land owned
you have been assessed on more than one ownership and have been charged too much
If you would like more information on your reassessment please contact us.
- Why has interest been imposed on my assessment?
OSR may impose interest for late or under payments, where misleading information has been provided regarding land ownership, and where a previous land tax liability exists. For more information on why interests and penalties may be imposed, read Interest and penalties
- How do I lodge an objection to my land tax assessment?
If the details on your land tax assessment are incorrect (eg you are incorrectly listed as a landowner, land is listed that you believe should be exempt) you need to update your details with us (Read What happens if my land ownership changes?) You can do this online, by contacting us or by lodging a variation return form.
If the details on your assessment are correct but you disagree with your land tax assessment, you have the right to lodge an objection. If you are objecting to more than one assessment, then you need to lodge a separate objection for each assessment. You need to lodge the objection within 60 days of the issue date of the assessment. Complete the Application for Objection form or call OSR for a copy of the form.
Note: Even if you are making an objection you will still need to pay your land tax or you may be charged interest on any outstanding liability.
Clearance certificates
- Do I need to apply for a clearance certificate or is this done by my solicitor/conveyancer?
If you are using a solicitor or conveyancer to help you purchase a property, this person will generally apply for a clearance certificate for you.
- When should I apply for a clearance certificate?
If you are not using a solicitor or conveyancer for your property purchase, you should apply for a land tax clearance certificate as soon as possible in the conveyancing process.
If you obtain a clear certificate towards the end of the calendar year and settlement happens in the following calendar year, you should make sure your certificate is for the year in which settlement will happen.
- How can I apply for a clearance certificate?
You can apply for the certificates online through an approved client service provider or download an application form and send this to OSR with a $15 processing fee. If you are applying through OSR payment should be by cheque or money order and made payable to the Chief Commissioner of State Revenue.
Please allow 10 working days for processing. Only individuals can apply for an instant clearance certificate over the counter - solicitors and other professionals cannot.
Note: if you are applying for a clearance certificate through a client service provider you may need to set up an account. You may also be charged a fee by the provider.
- How do I remove a charge from a clearance certificate?
To remove a charge from a clearance certificate you must pay any land tax owing. To do this the vendor must contact us to arrange for the charge to be released.
To make sure there is enough time to process a request to release the charge before settlement, vendors should allow at least 10 working days.
The vendor can also use an OSR approved settlement room to remove a charge from a land tax clearance certificate at the time of settlement.
To obtain a clearance stamp you will need three things:
the land tax clearance certificate showing a charge,
one of the following documents:
a current quote of an amount to clear for that particular land item, or
a land tax assessment including the land item
a bank cheque for an amount equal to, or greater than, the clearance amount or land tax assessment.
Both a quote for the amount to clear the land tax or the land tax assessment will be accepted as long as the due date for payment shown on the document has not passed.
You can obtain a clearance quote by contacting us.
- How do I get an updated clearance certificate?
You can apply for an updated clearance certificate certificate through an approved settlement room or online using our land tax clearance certificate updates service.
You can also get an updated clearance certificate:
through a client service provider
by contacting the Tax Call Centre
by requesting an update by letter or email
at an OSR counter in some instances.
The counter service is only available to individuals or, in exceptional circumstances, a solicitor and other professionals who have made prior arrangements with the relevant office manager.
- What is a clear certificate?
The certificate may be issued as 'clear' if:
the land is not liable or exempt from tax
the tax has been paid
the Chief Commissioner is satisfied payment of the tax is not at risk, or
the owner of the land failed to lodge a land tax return when it was due and the liability had not been detected when the certificate was issued.
- Who is protected by a clearance certificate?
A clear land tax certificate protects a purchaser from any outstanding land tax payable by a previous owner. It means that once the purchaser becomes the owner, they cannot be made to pay a prior land tax liability, unless they had been given notice of the unpaid charge prior to the issue of the certificate.
It does not provide any protection to the owner of the land at the time the land tax charge occurred. That owner must still pay any unpaid land tax, even if the unpaid land tax is not assessed until after the sale is completed.
Note: A clear certificate does not mean that land tax was not payable or that there is no land tax adjustment to be made on settlement, if the contract for sale allows for it.
Exemptions and concessions
- What land is exempt from land tax?
The two most common exemptions from land tax are your principal place of residence and land used for primary production. Other exemptions include:
land used and occupied primarily for boarding houses or certain property used for low-cost accommodation within a five kilometre radius of the Sydney GPO
retirement villages, aged-care establishments and nursing homes
religious and charitable institutions
other non profit organisations.
More information- Are seniors entitled to a land tax concession?
There is no land tax concession available for seniors.
Companies, concessional companies and trusts
- Do different rates apply to related companies?
A company is assessed in the same way as a sole owner unless it is related to another company. A related company can be assessed separately or assessed jointly with another company or companies to which it is related.
Where the concessional or joint concessional companies' total taxable land value does not exceed the premium rate threshold, but exceeds the general threshold, these companies are assessed at 1.6% of the taxable value above the land tax threshold plus $100. Each non-concessional company is then assessed at 1.6 per cen of their taxable value as it does not qualify for the threshold.
Where the total taxable land value of the group exceeds the premium rate threshold, the total taxable land value of each non-concessional company is assessed at 2%.
- I jointly own land with a company. Who pays the land tax?
A single assessment will be issued to you and the company as joint owners. If you own other interests in land, you will also receive a separate assessment of tax calculated at the general rate on the total value of all your interests, but you will be entitled to a deduction (Section 33 of the Land Tax Management Act 1956) of a proportion of the tax payable jointly by you and the company, to avoid double taxation.
- How is a trust defined for land tax purposes? What rates apply?
For land tax purposes, trusts can be divided into 7 categories:
special trusts
fixed trusts
superannuation trusts
trusts created by a will
concessional trusts
charitable trusts
A special trust is a trust where the trustee is the only person who meets the definition of ‘owner’ for land tax purposes, and the beneficiaries are not considered to be owners. If a trust does not meet one of the following trust definitions, it is a special trust. Examples of special trusts include most family trusts, discretionary trusts, some unit trusts* and some trusts created by a will. The land tax threshold does not apply to special trusts which are taxed at a flat rate for amounts up to the premium land tax threshold and then at the premium rate thereafter.
The following trusts do receive the land tax threshold.
A fixed trust is a trust where the beneficiaries are considered to be owners of the land at the taxing date of midnight on 31 December prior to the tax year. This is because they are presently entitled to the income and capital of the trust and these entitlements cannot be varied by the trustee in any way. Fixed trusts include some unit trusts* and bare trusts.
A superannuation trust is a complying superannuation fund, a complying approved deposit fund or a pooled superannuation trust under Sections 42, 43 and 44 respectively of the Superannuation Industry (Supervision) Act 1993 of the Commonwealth. If a superannuation trust is not a complying or pooled trust and is not a fixed trust, it is a special trust.
A trust created by a will is entitled to the threshold. However, if the trust is a testamentary discretionary trust, it will become a special trust 24 months after the date of death of the testator, or such further period as approved by the Chief Commissioner.
Note: For years prior to 2011, a testamentary discretionary trust becomes a special trust after 12 months.
A family unit trust is a trust that held land at midnight on 31 December 2005 with a taxable value of $1,000,000 or less; the unit holders have fixed entitlement to income or capital; and 95% or more of the units were family-owned. Certain criteria must be met to continue to qualify as a family unit trust.
A concessional trust is a trust where the land in the trust is held for the benefit of a person who is:
under 18 years of age, or
subject to a guardianship order under the Guardianship Act 1987; or
in the 'target group' under the Disability Services Act 1993 (NSW)
A charitable trust which includes trusts created for the relief of poverty, advancement of education or religion or for the benefit of the community.
Note: A beneficiary or unit holder in a fixed trust, a trust created by a will (other than a special trust), a family unit trust or a concessional trust is an owner of their interest in the trust and would need to take the value of their interest into account when a liability to land tax is being considered.
A unit trust may be a fixed trust, a special trust or a family unit trust. To be a fixed trust, certain criteria apply. If these criteria do not apply, the trustee may restructure the trust deed to meet the criteria but the threshold will only apply from the next tax year.
Valuations
- How is the value of my land assessed?
Annual valuations for land tax are made by the Valuer General, based on the value of your land on 1 July prior to each land tax year. These valuations are separate from those made approximately every three years for local government rating purposes. Up to 2006 you were assessed using the annual valuation. This was called the adjusted land value.
From the 2007 tax year onwards, the taxable value of each parcel of land you own will generally be determined by adding the land value for the current tax year and the land values that applied for the two preceding tax years then calculating the average. Where the land is less than three years old, the average of the years available is used.
Read more information on land valuations at Land and Property Information.
- What if I disagree with the valuation of my land?
You may object to the land valuation used in your land tax assessment by writing to the Land and Property Information within 60 days after you receive your notice of assessment.
Read more information on how to submit an objection on objecting to a land valuation on the Land and Property Information website.
Payments
- When do I need to pay my land tax?
You need to pay your land tax by the first instalment date shown on your land tax notice of assessment. If you pay your land tax in full by this date, you will be eligible for a 1.5% discount on your land tax.
- How do I pay my land tax?
Read more information on land tax payment options.
- What happens if I don't pay by the due dates?
If you don't pay your assessment by the due date and/or you have not advised OSR of an error in your assessment, your account will be referred to our Debt Management Branch. You will need to pay the full amount of land tax due, including accrued interest.
- Can I apply for an extension of time to pay my land tax?
If you are unable to pay your land tax by the due date, please contact OSR by phone to discuss payment options. For debt amounts over $1,000, you may have to complete and return an Application for a Payment Arrangement.
- What is the interest charged for late submission of registration forms and late payment of land tax?
If you do not pay your land tax on time you will be charged interest. The interest rate consists of a premium rate (8%) and a market rate added together. The market rate is adjusted quarterly.
- How can I find out if my payment has been received by OSR and where can I obtain my account balance?
You can contact us to check whether your payment has been received. Your payment to us will be shown on your bank statement as a payment to 'NSW OSR'.
- What if I have paid an incorrect amount?
If you have underpaid your assessment you will need to pay the balance of the amount outstanding as soon as you realise you have underpaid.
If you have overpaid your land tax you can contact us to get a refund.
More information
