Land Tax Thresholds 2026 — State-by-State
Land tax is an annual state-level tax on the unimproved land value of property you own — excluding your principal place of residence (PPR). For investors, it’s a significant ongoing cost. Thresholds and rates differ wildly by state.
How It Works
State governments value the unimproved land each year. If your total land holdings in that state exceed the threshold, you pay tax on the value above the threshold. PPR is generally exempt.
The tax is annual, assessed by calendar or financial year depending on state.
2026 Thresholds and Rates (Investor Land Holdings)
| State | Threshold | Rate above threshold |
|---|---|---|
| NSW | $1,075,000 | $100 + 1.6% (up to $6.5M) then 2% |
| VIC | $50,000 | Stepped: 0.2% up to $300k → 2.65% above $3M |
| QLD | $600,000 | 1.0% up to $1M, escalating to 2.75% |
| WA | $300,000 | 0.25% up to $420k → 2.67% above $11M |
| SA | $732,000 | 0.5%–2.4% (stepped) |
| TAS | $99,999 | 0.55%–1.5% (stepped) |
| ACT | $0 (no threshold) | ~1.025% flat (general rates absorb it) |
| NT | Effectively no land tax | n/a |
Victoria and Tasmania have surprisingly low thresholds — many small portfolios trip them.
The “Foreign Owner” and “Absentee” Surcharges
If you’re a non-resident or hold land via a foreign trust:
- NSW: Additional 4% surcharge
- VIC: Additional 2% absentee owner surcharge plus 8% foreign purchaser duty
- QLD: 2% foreign surcharge
- WA: No specific land-tax surcharge but 7% stamp duty surcharge applies
The Multiple-Property Pile-Up
Land tax aggregates across the state, not per property. Two units in Brisbane worth $500k each in land value combine to $1M — well above QLD’s $600k threshold.
For investors with 3–4 properties in one state, this can mean $5,000–$15,000/year of land tax.
Strategy: State Diversification
Some investors spread holdings across states to stay under each threshold. Owning one investment property in NSW ($800k land) and one in QLD ($500k) keeps both below threshold — zero land tax. Compare: two QLD properties at $500k each = $400k taxable land = ~$4,000/year land tax in QLD.
Strategy: Trust Ownership (Cautious)
Some properties are owned via discretionary trusts to manage land-tax distribution. But:
- NSW removes the threshold for trusts
- VIC has trust-specific rules
- Tax accountants generally find trust structures don’t help for land tax (and may hurt)
The strategy is more effective for capital-gains and asset-protection reasons than land-tax reduction.
The Build-to-Rent Exemption
If your property is rented as part of an APRA-recognized build-to-rent project (rare for individual investors), it may qualify for land-tax exemptions in some states. Not relevant for typical investors.
When You Cross the Threshold
If land values rise and you cross the threshold, expect a letter from the state revenue office about 6 months later. Land-tax assessments are based on prior-year land values, so you have time to plan.
Bottom Line
Before buying an additional investment property, calculate the incremental land tax in that state. A 2nd or 3rd property can push you over thresholds and add $4k–$10k/year. State diversification is one legitimate strategy; don’t structure into trusts purely for land tax.