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land tax rate remit

Australia Land Tax – An Introduction

Can You Avoid Remitting Your Land Tax?

It is possible to stop paying your monthly land tax. However, that would mean you also stop purchasing more properties. 

How would that sound?

I guess you wouldn’t want to give up on your investment property business.

So, what should you do instead?

Let’s find out!


No Land Tax Remittance on your first purchase

Your first land purchase will not attract any penalties unless it’s a high-value block of land.

You see, so many potential small investors shy off from buying these properties because of the land rates involved.

And I don’t think that should be the case.


Rules on Land Rates differ from one state to the other

Every state has its specific rules on how and when you can remit land rates. But generally, the rates will only come into effect after you’ve reached a particular land value threshold.

For instance, in Queensland, rates become effective on properties purchased under a trust. There isn’t any threshold for purchasing land under trust in NSW though. 

So you can see there are land tax loopholes. You only need to take advantage of each of them and avoid paying the rates sometimes.


Cast your portfolio net, far and wide

It is actually a brilliant idea to diversify your investments across different states. Nonetheless, it would be foolhardy to do so just because you want to avoid paying land rates.

The idea is to put down a solid strategy first.

And as Nathan narrates, he purchased many investment properties in various states because he’d seen the great potential. Further, he was able to strike super deals that have opened more doors for him.

For him, it wasn’t about saving money on tax.


Would you rather Apartments or Houses?

Many people don’t realize that you can buy several apartments and still operate below the land tax threshold. 

But how, you, may ask?

Most of these apartments contain just a smaller portion of land under the title.

Let’s say you bought a few apartments in Sydney 10 years ago. By now, you would be paying land rates. 

The same isn’t true if you had bought several apartments in Sydney. 


Land tax is part of the Business cost you must be ready to meet

Any type of business will require you to part with some costs. There isn’t a two way about it.

Honestly, why would you decline to buy an apartment that could fetch you more than $200,000 in three years because you fear to part with some few dollars in terms of land tax?

Nathan admits that he pays hundreds of thousands each year towards land tax. But then, that is how the system operates. 

However, he reveals that he’s bought more properties that he’s able to make more in profit and passive income.


Work with a good accountant

A knowledgeable and experienced accountant will help you minimize your overall taxation costs by applying for the different rules and exemptions on tax.


We pay tax on almost everything

Doing business and paying taxes are like siamese twins. The best thing to do is to pay your tax religiously but invest in properties that will fetch you massive profits.

Do you pay insanely high amounts of land tax each year? Call BOA & Co. accountants in Chatswood on 02 9904 7886 and our specialists will be pleased to assist you.

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minimise land tax

Minimise Land Tax in Five Easy Ways


Land tax is a tax payable based on the combined unimproved value of the land a person or entity owns. The land tax is calculated based on how much the land in question would be worth were it vacant. In other words, the land tax is payable on owned property and not the principal place of residence. The tax is imposed by all the state and territory governments; however, the rules and thresholds of the land tax impost differ with different states and, therefore, do exists. In recent years we have experienced booming property values, and land tax has become a greater burden to many Australian property investors. To every property investor, the land tax represents a high cost to owning property investment. Often investors raise the question of how can such land tax liabilities be minimised.

Encouraging, there exist ways as well as individualized tax planning strategies from a tax expert, all of which are legal that could help minimise the land tax burden.


1. Use the name of a person who may not have exhausted their respective threshold in a given state to buy a property

Since every person has a specific limit which, when exceeded, the cost of land tax in Australia goes up. Therefore, by using the name of the spouse whose threshold in a given state is not used up to buy a property, the new threshold is absorbed hence tax lowered.


2. Purchase a property such an apartment whose land values are below a certain threshold for the home state.

Houses usually have high land components compared to apartments, and one can own several apartments all within an individual’s threshold in some states of Australia. Nevertheless, it is essential to scrutinize land components of the investments of interest to determine the validity of a certain threshold.


3. Diversification in property investment in different states.

Investing in varying states of Australia, the land tax threshold ceiling would remain untouched, unlike single state investment. The spreading properties` investment in various states, the land tax paid reduces due to spread land values at different thresholds. Therefore, carry your eggs all, not in one basket.


4. Land tax liability can be reduced by the use of distinct firms or companies that offer an individual a separate threshold for a different property.

In various states of Australia, some entities exampled by the fixed trust can provide investors with a separate threshold within their rights, which enables them to enjoy several thresholds, thus lowering land tax liabilities.


5. The land purchase and sales time coupled with land tax assessment date per state.

Consideration of land tax assessment dates is an essential factor when selling property since the property seller is obliged to payment of land tax should it not be settled by the assessment anniversary. This would help reduce the incurrence of such tax even after the property sale.

Importantly, such ways shouldn’t be construed to mean failure to pay land tax for your properties. However, while evaluating the cost of holding an investment property, consideration of land tax, among other expenses, should be factored in to determine the capital gain in long-term investments realistically.


Do you think you may qualify for these land tax exemptions? Call BOA & Co. accountants in Chatswood on 02 9904 7886 and our specialist will be pleased to assist you.

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