Land Tax 101

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Land tax is an annual expense you need to factor into your other outgoings as a property investor. It’s calculated based on the value of your land holdings above a specific threshold. Value thresholds and when land tax is calculated are different in each state, so make sure you stay up to date on the latest developments in your start. Below is an overview of everything you need to know about land tax.

How is land tax calculated?

Land tax is levied at the end of each financial year or calendar year, depending on where the property is located. The land tax you’ll pay is calculated based on your property’s ‘unimproved value’. The ‘unimproved value’ of land is its market value under normal sales conditions. This is the land – not the value of the house.

The tax is levied on a sliding scale. Once the value of your land exceeds the exemption threshold, you are charged a lump sum plus a dollar or percentage of every dollar of the land’s value over the threshold. Your land will typically be valued by the State Government or local council. You should receive a notice about this annually.

In QLD, for an individually owned property, with the land values of $600,000 to less than $1 million, the rate of tax is $500 plus 1 cent for each $1 over $600,000. There are different rates for land values more than $1,000,000 onwards.

There are lots of variables and exemptions though including if the property is held in a trust or a company and if you are an Australian citizen etc.


Total taxable value of $400,000
Tax band is $350,000–$2,249,999.
Tax calculation = $1,450 + (1.7 cents × $50,000 excess) = $2,300
Add 2% absentee surcharge = $1,000
Tax payable = $3,300

Is land tax a tax deduction?

Your principal place of residence will not attract land tax, but it will be levied on any investment properties that you own. Any land tax you pay on your investment properties is a tax deduction. Use your assessment notice from your jurisdiction’s revenue office to claim a deduction at tax time.

How should you budget for land tax?

As an ongoing annual tax on investment properties, you should set enough funds aside throughout the year to cover your land tax. If you’re unsure how much to set aside, review the previous year’s land tax assessments or speak with your accountant to estimate how much you should set aside.

No matter what type of investment property you own, you need to know that you may be liable to pay land tax each year. Proactively estimating your land tax assessment and setting those funds aside throughout the year is critical to ensure you’re keeping up with all the outgoings associated with owning investment properties. Talk to your accountant for advice on setting funds aside for land tax, and make sure you’re factoring this cost into any future plans you have to grow your portfolio.

For more information on Land tax in QLD we recommend visiting:

Remember, this article is general in nature and is not financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.

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