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 2009 is based on all land held at as 31 December 2008.
- 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
a trustee of a trust
a beneficiary of a trust
a shareholder in a home unit company
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 part-way 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 two 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.
- 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 part-way 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.
Changes to land tax in 2009
- What happens if I do not pay my 2009 land tax bill?
If you do not pay your land tax assessment for 2009 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 2009?
If you are registered for land tax in 2008, OSR will check your records in 2009 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 have changed during 2008. If you are liable, we will send you a 2009 land tax assessment.
- How will land tax be calculated in 2009?
Your land tax liability (if any) for 2009 will be calculated based on the liable land you own at midnight on 31 December 2008. Read more information about land tax rates and thresholds.
- What is the land tax premium threshold?
A premium threshold of $2.25 million has been introduced for the 2009 land tax year. The premium threshold will apply to clients with total land holdings valued above this amount. A new rate of 2 per cent will apply to taxable land above the premium threshold.
Registering for land tax
- 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 2009. 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 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 2009, 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 2009.
If your account is overdue and you have misplaced your notice of assessment, please contact debt collection & 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).
- 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 2009 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 2008.
- 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 per cent interest in the jointly owned land, your individual assessment will include 50 per cent of the value of that land plus 100 per cent 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.
Clearance certificates
- How do I get a clearance certificate?
You can download an application form from the web, apply online through an OSR client service provider, or contact us for an application. The application must be submitted to OSR, together with a processing fee of $15.
- I am in the process of selling my land. Do I need to receive my notice of assessment and pay tax before settlement?
Yes, in most cases you will need to have received your notice of assessment in order to pay any outstanding land tax prior to settlement.
If you have not received your notice of assessment prior to settlement, read more information on What do I do if I need a clearance certificate for settlement?
If OSR is unable to issue you with an assessment (for example, if land values are not yet available), we will calculate an estimate required to clear your land tax liability to allow settlement to proceed.
- What do I do if I need a clearance certificate for settlement?
If you need a clearance certificate for settlement and you do not already have a certificate, you can apply online through a client service provider or contact us.
If you have a certificate that shows an outstanding amount, you can contact us directly for advice on clearing your certificate.
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
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
- How is a trust defined for land tax purposes? What rates apply?
For land tax purposes, trusts are divided into five categories:
fixed trusts
concessional trusts
superannuation trusts
special trusts
unit trusts.
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. Land tax is calculated on the combined value of the taxable land owned above the land tax threshold.
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)
- Guardianship Act 1987
- Disability Services Act 1993 (NSW)
A superannuation trust which 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, is calculated on the combined value of the taxable land owned above the land tax threshold. If a superannuation trust is not a complying or pooled trust and is not a fixed trust, it is a special trust.
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 previous trust definitions, it is a special trust. Examples of special trusts include most family trusts and discretionary trusts. The land tax threshold does not apply to special trusts which, in 2009, are taxed at a flat rate of 1.6 per cent for amount up to $2.25 million and 2.0 per cent there after.
A unit trust is a trust in which the unit holders are entitled, under the trust deed, to a fixed proportion of any distribution of income (income units) or capital (capital units) or both income and capital. Generally unit trusts are special trusts. Unit trusts may undertake to restructure the trust deed so as to be then classified as a fixed trust. If they restructure to become a fixed trust they will be entitled to any threshold from the next tax year.
- 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. A non-concessional company is assessed at the rate of 1.6 per cent on the combined taxable value of the land. From the 2009 tax year, a new premium land tax marginal rate of 2 per cent will apply if your total taxable land value is above $2,250,000.
- 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.
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 where 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 Department of Lands.
- 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 Department of Lands 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 Department of Lands 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 per cent discount on your land tax.
- How do I pay my land tax?
Read more information on how to pay your land tax at 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 Collections 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?
The current interest rate for the 2008-09 financial year for both late submission and late payment is 15.75 per cent per annum on the tax not paid by the due date. The interest rate consists of a premium rate of eight per cent and a market rate of 7.75 per cent. The market rate is adjusted on 1 July each year, based on changes in general interest rates.
- 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'.
