With the 2025 NSW Land Tax Assessments now arriving, it’s important to check if you’re paying more than you should. Many property owners miss out on exemptions or end up with unexpected charges simply because they don’t understand the rules. Here are some key factors to consider to help reduce your land tax liability.
1. Make Sure You’re Getting the Land Tax Threshold
If you own property through a non-fixed trust, you might not be able to claim the land tax threshold, which could cost you up to $17,200 per year. One way to regain this benefit is by switching to a fixed unit trust. This change can lead to big savings but there’d be some upfront duty / capital gains tax implications thus a detailed feasibility review is required.
2. Check If You’re Paying the Surcharge Land Tax by Mistake
Not all residential properties are subject to surcharge land tax, but many owners still get charged incorrectly. If your property is owned through a trust, or if you’re from a country with a double tax agreement, you may be eligible for an exemption. It’s worth reviewing your situation to ensure you’re not overpaying.
3. Understand the Primary Production Exemption
If you use your land for primary production, such as farming, you may qualify for an exemption. However, Revenue NSW has been closely reviewing cases where land has mixed uses, like having a home on the property. If your land is being assessed incorrectly, there are ways to challenge it and prove it qualifies for the exemption.
4. Claim the Principal Residence Exemption for Trust-Owned Homes
If your home is held in a trust, you may still be able to claim the principal residence exemption—provided certain conditions are met. Some property owners have successfully restructured their trusts to ensure they qualify. If your home is held in a trust, it’s worth looking into this option.
5. Restructure to Reduce Your Land Tax Bill
Owning multiple properties under different structures can sometimes allow you to access multiple land tax thresholds. In some cases, a corporate restructure or consolidation can lead to lower tax costs. Reviewing your property holdings and exploring different ownership structures could make a big difference in what you pay.
Take Action Now
Your land tax assessment is more than just a bill—it’s an opportunity to make sure you’re not paying extra. By checking if you qualify for exemptions, avoiding incorrect charges, and considering smarter ownership structures, you can reduce your costs and keep more money in your pocket.
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Disclaimer
This article serves as general information only and may not account for the unique circumstances of individual readers. For personalised and strategic solutions tailored to your specific situation, we invite you to seek professional advice from Chan & Naylor. Our highly experienced team is dedicated to helping you navigate the complexities of Australian taxation, ensuring that your financial strategies align with the latest regulations. Contact us today to embark on a path of informed and customised tax planning for your property investments.
