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Technical Update

NSW land tax in 2026: frozen thresholds, current rates and what changed

The settings for the 2026 NSW land tax year — the frozen $1,075,000 general and $6,571,000 premium thresholds, current rates, the 25% minimum ownership rule for the home exemption now fully in force, trust treatment and the 5% foreign owner surcharge.

Published Sources verified 5 min read

Applies to: 2026 NSW land tax year (assessed on land owned at midnight 31 December 2025); verified current at 12 July 2026 · NSW

The direct answer

NSW land tax for the 2026 land tax year is assessed on the taxable land you owned at midnight on 31 December 2025, using a three-year average of Valuer General land values. The general threshold is $1,075,000 (tax of $100 plus 1.6% above it) and the premium threshold is $6,571,000 ($88,036 plus 2% above it); both are frozen at 2024 levels. Your principal place of residence is generally exempt, but from 2026 the occupying owners must together hold at least a 25% ownership interest.

Key points

  • The 2026 NSW land tax thresholds are $1,075,000 (general) and $6,571,000 (premium) — frozen at 2024 levels by a 2024-25 NSW Budget measure that removed annual indexation, per Revenue NSW.
  • Tax is $100 plus 1.6% of taxable land value above $1,075,000, rising to $88,036 plus 2% of value above $6,571,000.
  • Liability is fixed at midnight on 31 December 2025 for the whole 2026 year — no pro rata — based on the average of the Valuer General’s unimproved land values at 1 July 2023, 2024 and 2025.
  • From the 2026 land tax year, the principal place of residence exemption requires the occupying owners to hold at least a 25% ownership interest — the transitional protection for pre-February 2024 claimants ended after the 2025 land tax year.
  • Special trusts (typically discretionary family trusts) get no threshold and pay a flat 1.6% from the first dollar of taxable land value, with 2% above $6,571,000.
  • Foreign owners pay surcharge land tax of 5% on all NSW residential land (2025 land tax year onwards), with no tax-free threshold and in addition to ordinary land tax.
  • 2026 assessment notices issued from 19 January 2026; paying in full before the due date on the notice earns a 0.5% discount, or interest-free instalment plans run over 3, 6 or 9 months.

What changed for the 2026 land tax year

The 2026 land tax year is assessed on the taxable NSW land you owned at midnight on 31 December 2025. Three settings define the year: the general and premium thresholds remain frozen at their 2024 levels ($1,075,000 and $6,571,000), the 25% minimum ownership rule for the principal place of residence exemption now applies in full, and Revenue NSW began issuing 2026 assessment notices from 19 January 2026.

Frozen thresholds change the trajectory

Until the freeze, the thresholds moved each year. Because they no longer index while the Valuer General’s land values continue to be reset annually, a rising three-year average value can carry a landholding over the threshold without you buying anything new — worth watching for owners whose taxable value sits just under $1,075,000.

2026 thresholds and rates

NSW land tax for the 2026 land tax year
Taxable land value (three-year average)2026 land tax
Up to $1,075,000 (general threshold)Nil — below the general threshold
Above $1,075,000 and below $6,571,000$100 plus 1.6% of the value above $1,075,000
$6,571,000 (premium threshold) and above$88,036 plus 2% of the value above $6,571,000

The 2024-25 NSW State Budget froze both thresholds for land tax years after 2024, so the figures above are fixed rather than indexed — the same amounts applied for 2025 and apply again for 2026.

How the thresholds moved before the freeze
Land tax yearGeneral thresholdPremium threshold
2020$734,000$4,488,000
2021$755,000$4,616,000
2022$822,000$5,026,000
2023$969,000$5,925,000
2024 onwards (frozen)$1,075,000$6,571,000

How the 2026 assessment is worked out

Land tax is assessed on the taxable land you own at midnight on 31 December each year — the taxing date — and is charged for the full following year. It is not pro rata: selling in February 2026 does not reduce a liability fixed on 31 December 2025.

Revenue NSW uses the unimproved land values determined by the NSW Valuer General as at 1 July each year, averaged over three years. For 2026, the values at 1 July 2023, 1 July 2024 and 1 July 2025 are averaged, and that average — not the current market price of the property — is what gets compared against the thresholds.

The home exemption and the 25% ownership rule

The principal place of residence (PPR) exemption applies to natural persons who use and occupy the property as their principal place of residence, with one exemption per family. It does not apply to land owned partly or wholly by a company or held in a special trust, subject to limited exceptions such as certain concessional or fixed trusts.

From 1 February 2024, the exemption can only be claimed where the occupying owners hold at least a 25% ownership interest, solely or collectively. Transitional provisions let existing claimants below 25% keep the exemption for the 2024 and 2025 land tax years only — from the 2026 land tax year, if the individuals living in the property together own less than 25%, the exemption no longer applies.

  • Building or renovating — the exemption can cover up to 4 years while a home is built or renovated, extendable to 6 years for exceptional delays.
  • Absences — a former residence can stay exempt for up to 6 years, or indefinitely where the owner is in full-time care.
  • Moving between homes — a one-year concession can apply to both properties.
  • Mixed use — a partial exemption can apply where the property is partly residence, partly something else.
  • Deceased estates — the exemption can continue for up to 2 years.

Note

The land tax PPR exemption is a NSW state-tax concept, separate from the federal CGT main residence exemption — qualifying for one does not automatically mean qualifying for the other, and eligibility for each is assessed on its own rules.

Trusts, structures and the foreign owner surcharge

Special trusts — which typically include discretionary family trusts — do not receive the land tax threshold. They are taxed at a flat 1.6% of the total taxable land value up to the premium threshold, with 2% on value above $6,571,000. Fixed trusts, where beneficiaries are presently entitled to income and capital, are eligible for the threshold, and a unit trust may be a special trust, a fixed trust or a family unit trust depending on its terms. Classification turns on the trust deed, and the difference is paid from the first dollar of land value — a material factor when weighing how investment property is held.

Surcharge land tax for foreign owners is 5% of the taxable value of all NSW residential land owned at midnight 31 December, for the 2025 land tax year onwards (up from 4% in 2023-2024 and 2% in 2018-2022). It has no tax-free threshold, is payable in addition to ordinary land tax, and can apply even where the land is exempt from regular land tax; a foreign owner may qualify for exemption only in limited cases, such as the intended principal place of residence pathway. Whether someone is a “foreign person” for surcharge purposes turns on specific statutory tests — check Revenue NSW guidance for your circumstances.

2026 assessment notices and payment options

Revenue NSW began issuing 2026 land tax assessment notices from Monday 19 January 2026. When yours arrives, check the land values, the three-year average and the ownership position at 31 December 2025 before paying — the notice is the point at which valuation or exemption issues surface.

  • A 0.5% discount applies if land tax or surcharge land tax is paid in full before the due date on the assessment notice (the discount excludes past interest or penalties).
  • Interest-free payment plans are available over 3, 6 or 9 months, with fortnightly or monthly payments.
  • Payment methods include BPAY, direct debit (for payment plans), credit card, and in person at Service NSW Centres or Australia Post.

Important

If a payment plan is defaulted, the plan is cancelled and the remaining balance becomes overdue immediately — and overdue land tax accrues interest. If cash flow is tight, choosing a realistic plan length up front matters more than the discount.

Hypothetical example — one investment unit over the threshold

Imagine a hypothetical investor, Priya, who owns one NSW investment unit (not her home) at midnight on 31 December 2025. The Valuer General’s unimproved land values for the property were $1,450,000 (1 July 2023), $1,500,000 (1 July 2024) and $1,550,000 (1 July 2025), giving a three-year average taxable value of $1,500,000. Her 2026 land tax is $100 + 1.6% × ($1,500,000 − $1,075,000) = $100 + $6,800 = $6,900. If she pays in full before the due date on her assessment notice, a 0.5% discount applies. This example is illustrative only — actual outcomes depend on individual circumstances, exemptions and the values issued by the Valuer General.

This example is entirely hypothetical and illustrates the mechanics only. It is not a client outcome, a prediction, or advice.

Limitations of this information

  • This resource covers the 2026 NSW land tax year only, current at 12 July 2026 — other states and territories run their own land tax regimes with different thresholds and rules.
  • It is general information, not personal tax, legal or financial advice; eligibility for exemptions and concessions is determined by Revenue NSW on the facts of each case.
  • The due date and any discount window are those shown on each individual assessment notice — this resource does not state a universal due date because per-notice mechanics were not verified.
  • Overdue-interest percentages, card payment surcharges, family unit trust qualifying criteria and the statutory definition of “foreign person” are not covered here because they were not verifiable at the verification date — check Revenue NSW before relying on any of them.
  • The threshold freeze reflects enacted law as published by Revenue NSW at 12 July 2026; future budgets can change these settings.

Practical next steps

  1. Note the taxing date — your 2027 position will be fixed by what you own at midnight on 31 December 2026, so settle any planned purchases or sales with that date in mind.
  2. When an assessment notice arrives, check the land values, the three-year average and the recorded ownership before the due date shown on it.
  3. If your home is co-owned and the occupants hold less than a 25% interest, review whether the PPR exemption still applies from 2026.
  4. If land is held through a trust, confirm with your adviser whether it is a special or fixed trust for land tax purposes — the threshold turns on it.
  5. Keep land tax assessments with your property records — how any land tax amount is treated for federal income tax or capital gains tax is a separate question with its own rules, covered in our CGT records checklist for property investors.
  6. For how land tax sits alongside your rental income and deductions, see our rental property tax service or contact the practice.

Frequently asked questions

For the 2026 land tax year, the general threshold is $1,075,000 of taxable land value and the premium threshold is $6,571,000. These thresholds were frozen at their 2024 levels by the 2024-25 NSW Budget and no longer index annually.

Official sources

The facts in this resource are drawn from the following official sources, each read on the date shown. If a source has changed since, the source prevails.

  • Thresholds and ratesRevenue NSW · retrieved 12 July 2026 · supports: the 2026 general and premium thresholds, the rate formulas, the threshold freeze and historical thresholds
  • How land tax is calculatedRevenue NSW · retrieved 12 July 2026 · supports: the 31 December taxing date, full-year (non-pro-rata) liability, and three-year averaging of Valuer General land values
  • Preparing for the 2026 land tax yearRevenue NSW · retrieved 12 July 2026 · supports: the end of the 25% ownership transitional provisions from the 2026 land tax year and assessment notices issuing from 19 January 2026
  • Principal place of residence exemptionRevenue NSW · retrieved 12 July 2026 · supports: PPR eligibility rules, the one-exemption-per-family rule, and the building, absence, moving, mixed-use and deceased-estate concessions
  • TrustsRevenue NSW · retrieved 12 July 2026 · supports: special trust taxation without the threshold, fixed trust eligibility and unit trust classification
  • What is surcharge land taxRevenue NSW · retrieved 12 July 2026 · supports: the 5% foreign owner surcharge from the 2025 land tax year, its residential-only scope and the absence of a tax-free threshold
  • Payment optionsRevenue NSW · retrieved 12 July 2026 · supports: the 0.5% early payment discount, 3/6/9-month interest-free payment plans, payment methods and plan-default consequences
Discuss your situation with us

This resource is general information for Australian residents, not tax advice. It does not consider your circumstances, and tax outcomes depend on individual facts. Speak to a registered tax agent before acting. It is also not financial product advice — we are not an Australian financial services licensee. Decisions about superannuation or other financial products should be discussed with a licensed financial adviser.

Last verified against official sources: · Next scheduled review by 12 October 2026 · Update sensitivity: high

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