What is land tax?
Information on NSW Land Tax available from: www.osr.nsw.gov.au/taxes/land.
Land tax is a tax levied on the owners of land in NSW as at midnight on 31 December of each year. In general, your principal place of residence (your home) or land used for primary production (a farm) is exempt from land tax. You may be liable for land tax if you own or part-own:
- vacant land, including vacant rural land
- a holiday home
- investment properties
- company title units, or
- residential, commercial or industrial units
Land tax rates and thresholds
Boarding House land tax exemption
Where at least 80% of accommodation available to boarding house residents are occupied by long term residents and fall within the tariff criteria, then an application can be made for a land tax exemption on the property. If less than 80% fall under this criteria then a pro-rata application can be made.
For full details go to the Office of State Revenue website www.osr.nsw.gov.au or phone 1300 139 816.
NSW Land Tax Objections – Members Guide
One of the expenses that comes with being a property investor is land tax. This is a state-based tax that is levied on the land value component of property held by investors. All states and territories, except the Northern Territory, charge land tax at different rates and using different thresholds. In NSW, for example, land tax in 2018 kicks in when the value is more than $629,000 and is charged at a rate of $100 plus 1.6% up to the premium threshold of $3,846,000, then 2% over that. So for a land value of $1 million your land tax bill would be $6036.
Every year in December Land tax assessment notices are sent. With the current market softening, it is apparent that in some cases, UCV (Unimproved Capital Value) assessments seem to have increased where in fact, we believe they should have reduced or remained static.
A recent media article debates this very issue.
As a member of POANSW, if you have received your land tax assessment notice and you believe that you assessment is too high, we would strongly encourage you to lodge an objection with the Valuer General of NSW. This is a simple process, and detailed information on how to object online is available at:
All you need to do is:
- Click online objection facility at the above website
- Click and insert details to be emailed an activation key
- Enter the activation key code and property number from your notice
- Complete details and enter the reasons for your objection
Objections must be lodged within 60 days of receipt of your assessment notice. Please also note that you must pay your assessment notice as its due despite lodging an abjection or face interest penalty.
When entering your reasons for objection, please remember:
- Always include relevant sales evidence – speak to a local real estate agent or better still a registered valuer will need to conduct a valuation and provide such evidence as an expert opinion. In one case we are aware off a registered valuer estimated a valuation $350,000 under the Valuer Generals and also did a 5 year back track valuation of subsequent years with a total sum differential close to $900,000. If this property owner is successful with their objection then this could result in a refund of close to $18,000 of land tax for this property owner with a valuation report that was just under $1000.00.
- Do some online research like veining recent sales on com.au(not asking prices but actual sales results are necessary) ideally at least 3 relevant sales. Search here: https://www.realestate.com.au/sold/
- You can also find useful property data via NSW FACS website: https://www.facs.nsw.gov.au/download?file=635672
- Your sales evidence should be worded like this:
- 123 Landtax Street Everytown sold in June 2018 for $500,000. It is a 3 bedroom house with double garage and land area of 600m². After allowing for the value of the improvements, the land has an analysed value of $300,000. Overall, this is superior to the subject property. It is a larger site, and has superior views.
- Be sure to include any detrimental features of the property – access is poor, topography makes it difficult to build, it is burdened by a significant easement for storm water, views have been obscured by recent construction, etc.
- Do not include newspaper articles or general information from the media as this evidence is treated as hype and not factual.
- It can take up to 90 days to receive a reply after lodging your objection.
The Valuer General publishes a guide to objections which contains useful information and can be found here:
If you are successful in your objection, please let POANSW know as we would like to collect some case studies.