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    Land Tax Minimisation

    Understand and legally minimise land tax across your portfolio

    What is Land Tax Minimisation?

    Land tax is levied by each state on the unimproved value of land you own (excluding your principal place of residence in most states). As portfolios grow, land tax becomes a significant cost. Legal minimisation strategies include spreading ownership across states, using different ownership entities, and timing purchases.

    How it works

    1. 1Each state has an annual threshold below which no land tax is payable
    2. 2Land values above the threshold attract land tax, rates escalate with total value
    3. 3Your PPOR is exempt in most states (not ACT or SA for all scenarios)
    4. 4Trusts, companies, and individuals each have different thresholds in most states
    5. 5Owning properties across multiple states spreads land across multiple thresholds

    Worked example

    NSW general threshold for the 2024 land tax year: $1,075,000 of land value (not property value).
You own two investment properties with land values of $600,000 + $700,000 = $1,300,000.
NSW land tax: $100 + 1.6% × ($1,300,000 – $1,075,000) = $3,700 a year.
Thresholds apply per state. Hold the second property in another state and each holding is assessed against its own state's threshold and rates.

    Pros

    • Geographic diversification of portfolio also minimises land tax
    • Understanding thresholds helps sequence purchases efficiently
    • PPOR exemption is a major tax benefit, keep it clean

    Cons

    • Rules change frequently, budgets can alter rates and thresholds
    • Managing properties in multiple states increases complexity

    Risks

    • Overseas trusts/companies: most states impose surcharge land tax (double or more), don't inadvertently hold through a foreign entity
    • Subdivisions trigger revaluation, land tax liability can increase unexpectedly

    Tax treatment

    Land tax is state-based, not a federal tax. It is deductible as an investment expense for income-producing properties. PPOR is generally exempt. ACT: land tax applies differently (general rates). Seek state-specific advice as thresholds, rates, and rules change each budget cycle.

    Official references

    Keep exploring

    Read property guides on the blog All strategies

    General Advice Warning

    The information on this site is general in nature and does not consider your personal circumstances, financial situation, or needs. Before acting on any information, you should consider its appropriateness having regard to your own situation and seek professional advice from a licensed financial adviser, mortgage broker, accountant, or solicitor.