How much land tax will you pay on a NSW development site?

Land tax is an annual NSW holding cost on the unimproved value of all your non-exempt NSW land. It is assessed on what you hold at midnight on 31 December and charged for the whole following year — never pro rata. A development site held through a DA, a tender and a build will usually cross more than one of these taxing dates, so it is rarely a single year’s bill.

Land tax is a state tax on the unimproved value of land — the Valuer General’s assessment of the land alone, without the building on it. You pay it when the combined value of all your non-exempt NSW land is more than the general threshold, regardless of whether that land earns any income. Vacant land is liable in exactly the same way as a leased or occupied property.

Land tax is not the NSW “property tax”. Revenue NSW describes property tax as an annual tax for first home buyers who opted into the First Home Buyer Choice initiative — a separate tax, on a separate base, assessed under its own notices. This calculator does not compute it; if that is the figure you came for, this page is not it.

Land tax is assessed on what you own at the taxing date — midnight on 31 December — and charged for the whole following calendar year. Revenue NSW’s own example makes the point plainly: sell in February, and you still pay land tax for the full year, because ownership at the taxing date is what matters, not how long you held the land after it.

That cuts both ways at settlement. A change in what you own this year only moves next year’s bill — buying on 20 December makes you liable for the coming year in full, while buying on 5 January defers that liability by a full twelve months. On a development site, exchanging a contract in December versus January can decide which party wears an entire year’s land tax.

General threshold $1,075,000: at or below it, no land tax. Above it, up to the premium threshold of $6,571,000, the formula is $100 plus 1.6% of the value above the general threshold. Above the premium threshold, $88,036 plus 2% of the value above it.

The 2024-25 State Budget froze both thresholds for land tax years after 2024, so they no longer move with the Valuer General’s average land values the way they once did. The value used is the Valuer General’s unimproved value, averaged over three years — a parcel created by subdivision less than three years ago is averaged only over the years since it was created.

Surcharge land tax is 5% from the 2025 land tax year (it was 4% for 2023-2024 and 2% for 2018-2022), charged on the whole land value with no threshold, and only on residential land. Revenue NSW’s definition of residential land expressly includes vacant land that is zoned or otherwise designated for residential use — so a residential development site is generally caught, and holding the land vacant is not a way around the surcharge.

There is a genuine counterweight: a foreign Australian-based corporation developing land for the construction and sale of new homes, or subdividing land for that purpose, may be eligible for an exemption or concession from the surcharge. It is not automatic — it must be applied for, on the facts of the project, before it can be relied on.

A special trust — Revenue NSW’s term for a trust that meets neither the concessional-trust nor the fixed-trust criteria, which it says can include family trusts, discretionary trusts, unit trusts and trusts created by a will — gets no threshold at all, and is taxed flat at 1.6% up to the premium threshold, then 2% above it. A fixed trust, by contrast, does get the threshold, so the trust’s type decides this, not the word on the deed. Neither is computed here.

Also not computed: related-company groups (where a non-concessional related company loses the threshold entirely), the principal-place-of-residence and primary-production exemptions, secondary assessments and apportionment across joint owners, and apportionment between residential and commercial use on a mixed site. A confidently wrong land tax figure is worse than an admitted gap — if any of these apply to your holding, treat this page as a starting estimate, not the assessment.

Land tax is a holding cost that runs for every year the site sits through a DA, a tender and a build — not a one-off line at settlement. It is charged on the Valuer General’s assessed value, which is not the price you paid and moves on its own schedule, and it keeps accruing even in a year where the site produces nothing at all.

That makes it a feasibility line, not a settlement-day surprise, and it sits alongside acquisition stamp duty as one of the costs a site carries before it earns anything back. See feasibility software for where holding costs like this sit in a full appraisal.

A $3,500,000 taxable land value site held by an Australian company in the 2026 land tax year.

The surcharge alone is more than four times the land tax the same site pays as an Australian-owned holding — a difference that belongs in the feasibility before the site is bought, not discovered on the first assessment notice after.