Land tax is calculated by applying a progressive rate structure to the combined (aggregated) site value of land held by an owner at the relevant date of assessment.
These terms are explained in further detail below:
Relevant date of assessment
Land tax is levied each financial year with the payment the responsibility of the owner of the land as at midnight on 30 June immediately before the financial year the tax is levied for.
Valuations of land
Valuations of land The site value for land tax purposes is determined by the Valuer-General under the Valuation of Land Act 1971 (the “VLA”). The value as at midnight on 30 June immediately before the financial year the tax is levied for is applied for the purpose of calculating land tax.
Site value
The meaning of site value is defined in the VLA. In broad terms, it is the value of the land excluding the value of any buildings or other improvements.
Under the VLA, the Valuer-General may make a separate valuation of any portion of any land or may value a number of portions of land as one.
Enquiries in relation to the valuation of land should be directed to the Office of the Valuer-General on 1300 653 346.
Any taxpayer who disagrees with the valuation of their land has the right to formally object to the Valuer-General.
See the Objections section for more details.
Rates of land tax
Once an owner’s combined (aggregated) land value is determined, land tax is calculated using a progressive rate structure.
A trust surcharge and new rate scale of land tax was introduced from the 2020-21 financial year. There are now two rate scales of land tax: general and trusts.
The rates of land tax effective as at midnight on 30 June 2020 for the 2020-21 financial year are as follows:
General rates
| Taxable value of land subject to tax | Amount of tax |
|---|---|
| Does not exceed $450,000 | nil |
| Exceeds $450,000 but not $723,000 | $0.50 for every $100 or part of $100 above $450,000 |
| Exceeds $723,000 but not $1,052,000 | $1,365.00 plus $1.25 for every $100 or part of $100 above $723,000 |
| Exceeds $1,052,000 but not $1,350,000 | $5,477.50 plus $2.00 for every $100 or part of $100 above $1,052,000 |
| Exceeds $1,350,000 | $11,437.50 plus $2.40 for every $100 or part of $100 above $1,350,000 |
Trust rates
| Taxable value of land subject to tax | Amount of tax |
|---|---|
| Does not exceed $25,000 | nil |
| Exceeds $25,000 but not $450,000 | $125.00 plus $0.50 for every $100 or part of $100 above $25,000 |
| Exceeds $450,000 but not $723,000 | $2,250.00 plus $1.00 for every $100 or part of $100 above $450,000 |
| Exceeds $723,000 but not $1,052,000 | $4,980.00 plus $1.75 for every $100 or part of $100 above $723,000 |
| Exceeds $1,052,000 but not $1,350,000 | $10,737.50 plus $2.40 for every $100 or part of $100 above $1,052,000 |
| Exceeds $1,350,000 | $17,889.50 plus $2.40 for every $100 or part of $100 above $1,350,000 |
Aggregation of site value
The site values of all taxable land in an ownership will be combined (aggregated) and land tax will be assessed on the total taxable value. The land tax will then be apportioned (or allocated) to each taxable parcel of land in the ownership.
See the apportionment of land tax to individuals parcels of land section for more details.
This is also the case for land held on trust that is owned by the same trustee for the same trust. Exempt land is not included in the combined (aggregated) total.
Assessment of land tax
For taxpayers who only own land in one ownership
Where an owner(s) owns more than one piece of land, the taxable value of all land owned by the same owner(s) is combined (aggregated) for the calculation of land tax.
Example 1
Poppy owns three separate parcels of land valued at $150,000, $100,000 and $420,000 as at midnight on 30 June.
Poppy does not own any other land.
Poppy would pay land tax for the following financial year based on the combined (aggregate) value.
| Land A | $150,000 |
| Land B | $100,000 |
| Land C | $420,000 |
| Total taxable site value | $670,000 |
Land tax payable on $670,000 = $1,100.00 (calculated using the 2020-21 financial year rates).
See the How is land tax assessed page for more details.
For taxpayers who own land in more than one ownership
The 2020-21 financial year introduces a second stage to aggregation to assess land tax for owners who own land in more than one ownership.
Stage One: Assessed in joint ownership
The taxable site values of all land within the joint ownership will be combined (aggregated) for the calculation of land tax.
A Land Tax Assessment will only be issued to the joint ownership if the total taxable site value is above the taxable threshold.
Stage Two: Assessed in individual's ownership
The taxable site value of all land owned solely by the individual, plus their share of the taxable site value of any land owned with others, will be combined (aggregated) for the calculation of land tax.
A Land Tax Assessment will only be issued to the individual’s ownership if the total taxable site value of the land they own individually plus their share of the land they own with others is above the taxable threshold.
A deduction will be applied to the individual’s Land Tax Assessment, which equates to the proportion of land tax on their share in the joint ownership. If there was no land tax liability in the joint ownership (for example, combined site value of all land in the joint ownership was below the taxable threshold) no deduction will apply in the individual ownership.
Example 2
Poppy and Daisy own three separate parcels of land valued at $150,000, $100,000 and $420,000 at midnight on 30 June. Each own a 50% share.
Stage One
The joint ownership would pay land tax for the following financial year based on the combined (aggregated) value.
| Land A | $150,000 |
| Land B | $100,000 |
| Land C | $420,000 |
| Total taxable site value | $670,000 |
Land tax payable on $670,000 = $1,100.00 (calculated using 2020-21 financial year general rates).
Poppy also owns another parcel of land with a site value of $400,000
Stage Two
Poppy would pay land tax for the following financial year based on the combined (aggregated) value of the land they own, or partly own.
| Land A (50% share of $150,000) | $75,000 |
| Land B (50% share of $100,000) | $50,000 |
| Land C (50% share of $420,000) | $210,000 |
| Land D (100% share of $400,000) | $400,000 |
| Total taxable site value | $735,000 |
Land tax payable on $735,000 = $1,515.00 (calculated using 2020-21 financial year general rates).
Poppy would also receive a deduction of $550.00 (being 50% of land tax assessed in the joint ownership).
| Land tax assessment | $1,515.00 |
| less deduction | - $550.00 (50% of $1,100) |
| Total payable | $965.00 |
See the How is land tax assessed page for more details.
Land held on trust
New provisions were introduced in the 2020-21 financial year in relation to how land held on trust is assessed for land tax.
Land held on trust will be assessed with other land held on trust for the same trust with the same trustee and will generally not be combined (aggregated) with other land the trustee owns in their own right. There are exceptions where the trustee is also listed as the beneficiary of the trust.
Land held on trust under a discretionary, fixed or unit trust is subject to the trust surcharge which is a higher rate of land tax (trust land tax rates) and a lower land tax threshold (currently $25,000).
The general rate of land tax, rather than the trust rate of land tax, may apply to certain trusts.
See the land held on trust section for more details.
See the Land Tax Guide to Legislation: Changes - Joint Owners, Land Held on Trust and Related Corporations for more detailed information.
Related Corporations
Where two or more corporations are related, the land they own will be assessed for land tax as if the land was owned by one corporation.
See the related corporations section for more details.
Apportionment of land tax to individual parcels of land
Where there is more than one taxable parcel of land in an ownership, land tax assessed on the combined (aggregated) taxable value will be apportioned (or allocated) to each taxable parcel of land, based on the individual parcel of land's site value.
Example 3
Using the scenario in example 1, the total land tax assessed for the ownership was $1,100.00
Poppy’s land tax is then is apportioned to each property in the ratio of its taxable site value to the total taxable site value of the ownership, as follows:
Land tax apportioned to:
| Land A | $150,000 / $670,000 | x $1,100.00 | = $246.28 |
| Land B | $100,000 / $670,000 | x $1,100.00 | = $164.17 |
| Land C | $420,000 / $670,000 | x $1,100.00 | = $689.55 |
| Total | = $1,100.00 |