Land tax is an annual state tax on the land you own, not counting your home. For property investors it is one of the biggest ongoing costs after interest, and it is easy to underestimate because it is charged on the land value set by the state valuer, not the price you paid, and on all your land in that state added together.
2026–27 thresholds for individuals
Each state sets its own tax-free threshold and rates. These apply to land held by individuals:
- New South Wales: Tax-free up to $1,075,000. Then $100 plus 1.6% above that, and 2% above the $6,571,000 premium threshold.
- Victoria: Payable from $50,000: $500 up to $100,000, $975 up to $300,000, then rising in steps to 2.65% above $3 million.
- Queensland: Individuals pay from $600,000: $500 plus 1% above that, rising to 2.25% above $10 million.
- Western Australia: Tax-free up to $300,000, a flat $300 up to $420,000, then rising to 2.67% above $11 million. Perth metropolitan land also pays MRIT of 0.14% above $300,000.
- South Australia: Tax-free up to $936,000 for 2026–27, then 0.5% above that, rising to 2.4% above $3,504,000.
- Tasmania: Tax-free up to $125,000, then $50 plus 0.45% above that, and 1.5% above $500,000.
- ACT: Residential property that is not your home pays a $1,778 fixed charge plus 0.54% to 1.26% of the average unimproved value. Commercial land pays no land tax.
- Northern Territory: no land tax.
Trusts and companies often pay more. Several states give them a lower threshold or none at all, and some add a surcharge for foreign owners.
What an investor pays
The table shows annual land tax for an individual whose only taxable land is an investment property with the land value shown. Remember that it is the land value, which is usually well below the property's market price.
| State or territory | $800,000 land | $1.5m land |
|---|---|---|
| New South Wales | $0 | $6,900 |
| Victoria | $3,450 | $9,150 |
| Queensland | $2,500 | $12,750 |
| Western Australia | $1,250 | $6,250 |
| South Australia | $0 | $2,820 |
| Tasmania | $6,238 | $16,738 |
| ACT | $9,898 | $18,628 |
| Northern Territory | $0 | $0 |
The spread is wide. At $800,000 of land value, an investor pays nothing in New South Wales, South Australia or the Northern Territory, but several thousand dollars a year in Tasmania and the ACT. At $1.5 million the order changes again, because the states with high thresholds then apply their rates to everything above them.
Things that catch investors out
- Aggregation: land you own in the same state is added together, so a second property can push you over the threshold or into a higher bracket.
- Separate states, separate thresholds: owning across states means each state taxes only its own land, which can lower the total.
- The ACT works differently: it taxes rented residential property with a fixed charge plus a rate on the land value, from the first dollar, and doesn't tax commercial land.
- Perth: metropolitan land in Western Australia also pays the Metropolitan Region Improvement Tax.
- Your home is usually exempt, but only while you live in it. Rent it out and it can become taxable.
Is land tax deductible?
Yes. Land tax on an investment property is a deductible expense against your rental income, so its after-tax cost depends on your marginal tax rate. It still reduces your cash flow each year, which is why it belongs in any comparison between suburbs or states.
To work out land tax on your own holdings, including the working for each bracket, use the land tax calculator. To see it alongside rent, interest and stamp duty, use the residential investment calculator.