Do you own property in NSW?

At the start of this new land tax year, as assessments are issued, it is important to review your assessment to ensure that you are paying the appropriate amount.

How much will I pay?

The 2023 year (year ended 31 December 2022) General land tax threshold for NSW is $969,000 (up from $822,000 in 2022); the premium threshold is $5,925,000.

Land tax is generally assessed at 1.6% of the taxable value above the land tax threshold (if eligible) plus $100, and 2% above the premium threshold.

There is an early payment discount of 0.5% available on payments made within 30 days of service of the Notice of Assessment of Land Tax for the 2023 Land Tax Year. This could be cash saving to consider for land owners.

What if my assessment is incorrect?

Details of your assessment notice can be updated online before the first instalment date, or if it’s a ‘nil’ assessment, within 40 days of the date outlined on your assessment notice.

Objections to land tax assessments are required to be lodged within 60 days of the assessment being made. This can be made if you believe the legislation has been applied incorrectly to your assessment, or if you believe that the land value on your assessment needs reviewing.

How do I know if I am overpaying?

If you own property, you may be liable to pay land tax. However, landowners may be overpaying if they have not considered:

  • If the value assessed is fair and accurate
  • The exemptions which could apply
  • Properties sold in the past year
  • Where the property is being assessed (especially with trust ownership)
  • Multiple property ownership
  • Level or percentage of ownership.

We are aware that in some instances the valuations issued in the current year land tax assessments are substantial in comparison to previous years. If you feel your valuations are inaccurate, please contact your PKF adviser to discuss further.

What are the key changes for the foreign ownership implications in 2023?

The Surcharge Land tax payable on residential land owned by foreign persons has increased from 2% to 4% of the taxable value of land owned at midnight on 31st December 2022.

Australian citizens are not subject to foreign surcharges regardless of where they live in the world.

In situations where the property is held within discretionary trusts, it is crucial to make sure the trust deed is amended to exclude future foreign beneficiaries to be exempt from paying surcharge land tax.

Please note this article is based on thresholds within the state of NSW and does not reflect thresholds in other states.

If you require assistance reviewing your land tax assessment, please get in contact with your PKF adviser.

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