Anyone who owns property in New South Wales, other than their
principal place of residence, will be required to pay Land Tax
regardless of whether the property is vacant land, commercial,
industrial, residential, investment or a holiday home. Land Tax is
payable even if that property does not earn any income.
The amount of Land Tax payable is based on the combined value of
any taxable land that you own in New South Wales (except exempt
land) but the value is not based on any structural improvements. It
is just the unimproved capital value and it applies even if you
have only partial ownership in the land.
A deceased estate will receive an exemption for 12 months from
the date of death from paying Land Tax if the property was the
deceased's principal place of residence. The estate will also
receive an exemption up until the date the transfer of property is
registered at the Office of Land and Property Information,
providing it is not more than 12 months from the date of death.
If the deceased's principal place of residence is still used
and occupied as the principal place of residence:
By the person named in the Will who has a right to occupy the
deceased's principal place of residence; or
Someone who lived with the deceased immediately before their
death and has the executor's permission to continue living in
the deceased's principal place of residence, then that occupant
is deemed to be the owner and Land Tax is not payable during the
From 1 January 2015, the tax free threshold is $432,000 and Land
Tax is calculated at the rate of $100 plus 1.6 cents for each $1
the property value exceeds $432,000. A higher rate applies to
properties valued over $2,641,000.
Any person preparing a will and any executor of a deceased
estate, should take careful advice about the tax implications of
the will so that they can manage the risk of unnecessarily
incurring a land tax liability.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Exemptions or concessions on stamp duty could apply when contemplating the purchase or transfer of NSW real estate.
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