Land Tax Exemption Changes

Persons who use and occupy property as a principal place of residence can claim an exemption for land tax. The recent amendment to schedule 1A of the Land Tax Management Act 1956, introduced in the 2023-24 NSW State Budget, however, states the exemption may only be available to persons who own an interest of at least 25% in their principal place of residence.

General requirements of the provision include only one principal place of residence worldwide and one exemption per family. Furthermore, the exemption does not apply to property owned either partly or wholly by a held trust or company. Eligible persons must also use the land for residential purposes and have continuously used the land prior to the taxing date.

Transitional provisions provide that those claiming the exemption from land tax may continue claiming the exemption for the 2024 and 2025 tax year despite owning less than 25% interest in land; therefore, the minimum 25% ownership requirement may apply to these owners from the 2026 land tax year onwards. 31 January 2024 is the final date for these transitional provisions to be claimed. However, those purchasing property after 1 February 2024 and who own less than 25% may not be entitled to the outlined transitional provisions meaning they are liable from the 2025 tax year. For more information regarding these changes as well as types of principal place of residence exemptions visit Revenue NSW.