Glossary
Land tax
Land tax is an annual state or territory tax on the value of land a person or entity owns, generally excluding the principal place of residence. Thresholds, rates, surcharges and exemptions differ between jurisdictions.
An example
An investor who owns several properties in one state receives an annual land tax assessment based on the combined value of the land they hold there.
Why it matters
Land tax is a holding cost that affects investment returns and development feasibility, especially on land held for a long time. Arrears can lead to a charge on the land, so it should be planned for.
Points to check
Check whether land tax applies to the property in the state where it is located, which thresholds and exemptions are available and whether surcharges apply to trusts or foreign owners. Land tax may be assessed on the land you hold at a fixed date each year, so the timing of a purchase or sale matters. Include land tax in holding costs and feasibilities, and confirm the position with the state revenue office.
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