📅 Rates checked: October 2026·Sources: SRO Victoria · Revenue NSW · Queensland Revenue Office · RevenueSA · WA Department of Treasury and Finance · SRO Tasmania · ACT Revenue Office
How land tax works in Australia
Land tax is calculated annually on the total land value you own in each state, with your principal residence excluded. Each state uses a progressive (bracketed) rate structure: the more land value you hold, the higher the rate on the excess above each threshold.
The critical concept for portfolio investors is aggregation: all your investment properties in a state are combined for land tax purposes. In Victoria, two properties with $400,000 of land value each are assessed as $800,000 combined, which costs $3,450 a year, more than the $1,650 each would cost on its own. The ACT is the exception: it charges land tax on each property separately.
Land tax is a deductible holding cost against rental income. Where the deduction reduces tax on your income straight away, $5,000 of land tax at a 37% marginal rate costs $3,150 after tax. For established residential properties bought after 12 May 2026, losses are quarantined from the 2027–28 income year, so that saving may be deferred.
State-by-state land tax guide
| State | Tax-free threshold | Starting rate above threshold | Top rate |
|---|
| VIC | $50,000 | $500 flat ($975 from $100,000); 0.3% above $300,000 | 2.65% above $3M |
| NSW | $1,075,000 | $100 + 1.6% | 2.0% above $6,571,000 |
| QLD | $600,000 | $500 + 1.0% | 2.25% above $10M |
| SA | $936,000 (2026–27) | 0.5% | 2.4% above $3,504,000 |
| WA | $300,000 | $300 flat to $420,000, then 0.25% | 2.67% above $11M |
| TAS | $125,000 | $50 + 0.45% | 1.5% above $500,000 |
| ACT | None (per property) | $1,778 fixed charge + 0.54% of average unimproved value | 1.26% above $2M |
| NT | N/A | No land tax | — |
General rates for individuals, checked October 2026. Trust, absentee and foreign owner rates are higher. VIC rates include the COVID debt levy increases (2024–2033). Perth metropolitan land also pays MRIT (0.14% above $300,000). Sources: VIC, NSW, QLD, SA, WA, TAS, ACT.
Frequently asked questions
What is land tax?
Land tax is an annual state government tax levied on the unimproved value of land you own — excluding your principal place of residence. Every state and the ACT imposes land tax using its own thresholds, rates and rules; the Northern Territory does not. It is a holding cost for property investors that increases as your portfolio's land value grows, particularly once you own multiple properties.
Who pays land tax in Australia?
Land tax is paid by individuals, companies, and trusts that own taxable land above the relevant state threshold. Your principal place of residence (the home you live in) is exempt in all states. Investment properties, holiday homes, commercial properties, and vacant land are all subject to land tax. In most states, land is aggregated across all taxable properties you own in that state — so multiple investment properties push you into higher tax brackets faster.
How is land value different from property value?
Land value (also called unimproved site value or unimproved capital value) is the value of the land only — excluding the building, improvements, and fixtures on it. This is typically lower than the total property (market) value. The land value used for tax is set by your state or territory valuer-general and appears on your land valuation or land tax notice (in some states, also on your council rates notice). How much of a property's price is land varies widely by location and property type.
How does land tax affect a property portfolio?
Land tax accelerates sharply as your portfolio grows because states aggregate all investment properties in that state when calculating your total taxable land value. In Victoria, for example, two investment properties with $500,000 of land value each are assessed together as $1,000,000, which costs $4,650 a year, against $1,950 for one of them on its own. Rates keep climbing, to 2.65% on land value above $3 million. The ACT is the exception: it charges land tax on each rental property separately. This is why portfolio investors often spread holdings across states or hold properties in different entities (noting that trust structures have different, often higher, land tax treatment).
Is land tax deductible?
Yes — land tax is a deductible holding cost for investment properties. It is claimed as a deduction against rental income in the same way as council rates, insurance, and management fees. If the property is negatively geared, land tax adds to the rental loss. From the 2027–28 income year, losses on established residential properties bought after 7:30 pm (ACT time) on 12 May 2026 can no longer be deducted against your salary (see our negative gearing changes guide).
What is the land tax threshold?
For individuals: Victoria $50,000 (a flat $500 applies from $50,000, rising to $975 from $100,000); New South Wales $1,075,000 general threshold, with a premium rate of 2% above $6,571,000 (both frozen since the 2024 land tax year); Queensland $600,000; South Australia $936,000 for 2026–27 (indexed each 1 July); Western Australia $300,000; Tasmania $125,000. The ACT has no threshold: each rented or non-home residential property pays a $1,778 fixed charge plus a valuation charge. The Northern Territory has no land tax. Your home is generally exempt and doesn't count towards the threshold.
Rates checked against each state revenue office in October 2026. SA thresholds change every 1 July and the ACT fixed charge is indexed each year. NSW assesses an average of 3 years of land values. Trusts, absentee owners and foreign owners pay different (generally higher) rates, and surcharges are not included. Not financial or tax advice.