NSW Land Tax Update

A proposed amendment to the Land Tax Act 1956 (NSW) will impose a 0.75% surcharge on land tax payable by foreign owners for residential land from 2017.

Foreign owners are defined as:

  • Individuals not ordinarily resident in Australia;
  • A corporation or trustee of a trust in which such an individual holds a substantial interest; or
  • A foreign government.

This definition has been adopted to ensure that Australian citizens residing overseas cannot be considered foreign persons, as well as New Zealand citizens with special category visas that have been in Australia for 200 days of the previous twelve months. 

Unoccupied land that is intended to be a principal place of residence may be exempt from land tax under the principal place of residence exemption with changes brought by the State Revenue Legislation Amendment Act 2016 (NSW). Prior to the amendments, if land was occupied by an individual other than the owner, the exemption could be claimed for four tax years after the year during which building works commenced on site.

The amendments mean that the exemption can be claimed for the four years following the departure of the non-owner occupier if the Chief Commissioner of State Revenue is satisfied that “significant steps” to commence or enable the construction work have been taken by the end of the four tax years.

The land tax threshold for 2016 is $482,000. If you own taxable land worth more than the threshold, you will have to pay land tax.

Click here to read more about recent changes to the law pertaining to land tax.

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