Land Tax & Absentee Owner Surcharges

Buying property in Australia isn’t just about the upfront costs. If you’re a foreign investor or non-resident, you’ll also face ongoing holding costs, including land tax, and in many states, a surcharge on top of that if you’re classified as an absentee owner or foreign person.

Land tax varies significantly between states, both in how it's calculated and how absentee surcharges are applied. Knowing the rules for the state where you own property is crucial to avoid surprises and plan your cash flow.

What is Land Tax and How Is It Calculated?

Land tax is a state-based annual tax levied on the unimproved value of land (not the market value of the property). It generally applies to investment or non-primary residence properties. Your principal place of residence (PPR) is typically exempt if you are a resident and meet the criteria.

Each state:

• Sets its own thresholds (value above which tax is payable),

• Has different rates (often tiered or progressive), and

• Applies surcharges to absentee or foreign owners.

Note: If you own property in multiple states, you may pay land tax in each state separately – it’s not calculated on a national basis.

Who is Considered an “Absentee” or “Foreign Owner”?

This is one of the most confusing and important issues for foreign investors. If you’re classified as an absentee owner, you may be liable for an additional land tax surcharge, which can significantly increase your annual costs.

Each state defines "absentee" or "foreign person" differently:

Common Criteria:

• You may be considered absentee or foreign if:

• You reside overseas for more than 6 months in a year;

• You are not an Australian citizen or permanent resident;

• You own the property through a foreign company or trust;

• You do not ordinarily reside in Australia.

Even temporary residents and certain visa holders may be treated as foreigners in some states.

 State-by-State Land Tax Surcharges (2025)

State	Absentee Surcharge Rate	Land Tax Threshold (Local Owners)	Notes
NSW	4% (rising to 5% from 2025)	$969,000 (2024 threshold)	Applies on top of standard land tax; no threshold for surcharge
VIC	2% absentee owner surcharge	$300,000	Applies to residential property only
QLD	2% for absentees + 0.5–2.75% standard	$600,000	Removed foreign land tax surcharge in 2023, but absentee definition still applies
WA	No land tax surcharge (yet)	$300,000	No absentee surcharge as of 2025
SA	No land tax surcharge	$534,000	Standard rates apply, no foreign/absentee surcharge currently
TAS	No surcharge	$50,000	Lowest threshold in Australia
ACT	No surcharge	N/A	Land tax only applies to rental properties
NT	No land tax at all	N/A	Only state/territory without land tax

In NSW and VIC, land tax surcharge applies regardless of the total land value — there’s no threshold. This means even if you only own a $200,000 parcel of land, the surcharge still applies.

When Are You Exempt from the Surcharge?

You may be fully or partially exempt from land tax surcharges if:

1. You Are an Australian Citizen or PR

Even if you live overseas temporarily, many states still consider you a resident for land tax purposes.

2. You Are a New Zealand Citizen

Holding a Special Category Visa (subclass 444) may exempt you in some states (e.g., NSW, VIC).

3. You Use the Property as Your Main Residence

Some states provide principal residence exemptions, but:

• You must occupy the property, and

• Be an Australian tax resident.

4. You're Deemed a Resident for Land Tax

In some cases, if you maintain ties to Australia (e.g. employment, family, driver’s licence, length of stay), you may argue local residency.

5. Special Rulings or Discretionary Exemptions

Some states allow applications for exemptions or rulings, especially if you become a PR after purchase or change how the property is used (e.g. from vacant to tenanted).

Key Tips for Investors

Land value ≠ market value: Check land value on council rates notice or state land registry.

Plan for annual costs: Land tax is payable each year, typically assessed on 31 December or 30 June depending on state.

Consider ownership structure: Land held via a trust or foreign company may be surcharged unless excluded.

Always register for land tax after settlement, don’t wait for the revenue office to find you.