New year, new land tax considerations – what NSW, VIC and QLD property owners need to know for 2026

Now that we're well into 2026, all NSW, VIC and QLD property owners should take a moment to revisit their land tax position. New rules are now firmly in place and may affect whether you qualify for key exemptions, particularly if you share ownership of your home or hold property through more complex structures. It is essential to understand your land tax obligations and overall tax obligations to ensure compliance and make informed decisions as a property owner in these states.

If you are in NSW or VIC, land tax assessment notices have already been issued, making now the ideal time to understand what applies to you and how to avoid any surprises. Understanding land tax and staying informed about your obligations is crucial to managing your property investments effectively.

Land tax thresholds for 2026 

Each state’s land tax thresholds for the 2026 year remain unchanged, but understanding your obligations is crucial to managing your property investments effectively.

NSW:

• General threshold: $1,075,000 (this is the current land tax threshold and also serves as the tax free threshold for most property owners in NSW)
• Premium threshold: $6,571,000

VIC:

• General threshold: $50,000 (current land tax threshold and tax free threshold for individuals)
• Trusts: $25,000 (current land tax threshold for trusts)

QLD:

• General threshold: $600,000
• Absentees, companies, trusts and super funds: $350,000

These thresholds continue to be frozen, rather than indexed to property values. While this may seem good on the surface, rising land values mean more property owners are gradually being drawn into the land tax net over time. Land tax in each state is assessed based on the combined value of total land holdings, so as the aggregate value of your land holdings increases and exceeds the land tax threshold, your land tax liability will also increase.

Land tax rates

For the 2026 land tax year, the NSW rates remain. Land tax is an annual tax levied by the NSW government and is calculated based on the total land value of taxable land holdings:

• Land value above the general threshold:
  $100 plus 1.6% of the combined land value above $1,075,000. Land tax is calculated on the combined value of all taxable land above the threshold, and the taxable land value is determined using the average land value (average value) over the past three years as assessed by the NSW Valuer General.
• Land value above the premium threshold:
  $88,036 plus 2% of the combined land value above $6,571,000. The average land value over the current and previous two years is used to determine the taxable land value for this calculation.

The land tax liability and land tax payable are based on the total land value of all taxable land, and the annual tax is assessed each year. Note that the tax assesses the land value alone, not including buildings or other improvements and average land value is a key factor in how land tax is calculated in New South Wales.

VIC rates are unchanged from previous years, consisting of a progressive rates model and the absentee owner surcharge. A full breakdown of these rates can be found here.

QLD rates also remain unchanged, with a progressive rates model and maximum general rate of 2.25%.

Principal place of residence exemption: A key change is now locked in for NSW

One of the most important rules NSW property owners need to be aware of in 2026 relates to the principal place of residence (PPR) exemption. A primary residence is typically exempt from land tax, while investment properties and other non-exempt land owned, such as commercial properties or vacant land, may be subject to land tax.

From the 2026 land tax year onwards, new changes mean those living in the property must have a total ownership of at least 25% to qualify for the exemption. For joint owners of jointly owned land, land tax is assessed collectively, with a primary taxpayer designated for the group. Each joint owner then receives an assessment notice, and a secondary deduction is applied to prevent double taxation on the same land.

For anyone in shared ownership arrangements, particularly family structures or succession planning scenarios, this change can have a real impact. Other exemptions available in NSW include land used by non profit organisations, boarding houses, primary production land, commercial properties, and vacant land. These categories may be exempt from land tax depending on their use and ownership, while non-exempt land owned is aggregated for tax assessment.

VIC VRLT notifications due – what holiday‑home owners need to know

Victorian clients who own a holiday house should be aware that Vacant Residential Land Tax notifications are due by 15 February 2026.

Also important to note, from the 2026 land tax year, the rules have expanded so that unimproved residential land is now subject to VRLT if it has remained undeveloped for at least five years. The unimproved value of the land, as assessed by the Valuer General, is used to determine liability for VRLT, so owners should ensure their land tax assessment accounts for this.

Preparing for the 2026 land tax year

A few proactive steps can help you stay in control:

• Review your ownership structures, particularly where property is jointly owned or held across family groups
• Check your land valuations and consider lodging an objection if something doesn’t look right
• Factor land tax into acquisition decisions, especially when expanding your property portfolio. Consider the impact of land tax on your total land holdings, as the more you own (including non exempt land), the more it affects your total taxable value and whether you exceed the land tax threshold.
• Seek advice early if your circumstances have changed and ensure you're up to date with how this this may affect your exemptions, thresholds, and structures.

Understanding land tax exemptions, the land tax threshold, and how land tax in NSW, VIC and QLD is assessed on the land owned is essential for property owners. You are liable for land tax on non exempt land, and your liability is based on the total taxable value of the all the land you own. Staying informed about relevant tax laws and changes is crucial to ensure compliance.

Foreign citizens should be aware of the land tax surcharge, which applies to certain residential land holdings. Check the Revenue NSW website for the latest information on rates, exemptions, and obligations.

It is important to pay land tax on time to avoid unpaid land tax, interest, and penalties. Revenue NSW offers payment options that can help you better manage your obligations.

Property investors should consider whether they can claim land tax as a deduction, depending on their circumstances and current tax laws. Revenue NSW is responsible for issuing assessment notices, managing compliance, and providing resources for landowners.

Land tax is becoming less about last-minute compliance and more about forward planning. With thresholds frozen and exemptions tightening, small details can make a meaningful difference to your position.

If you’d like support reviewing your land tax exposure or understanding how these rules apply to your situation, our team is here to help you plan with confidence and clarity.

Speak to a trusted advisor today by calling 1800 988 522 or visiting cutcher.com.au/contact.

About The Author

Jace Pedonese is a Partner in our Accounting & Tax Division, helping clients navigate complex tax and business advisory matters with clarity and confidence. Supportive, trusted, and reliable, he works closely with clients to set financial goals, optimise strategies, and maximise business potential, ensuring informed and timely decision-making.