Land tax

Land tax is an annual state or territory tax levied on the unimproved value of land owned above a threshold, applying to investment and commercial property but generally not to a person's principal place of residence, with rates, thresholds and aggregation rules varying by jurisdiction and, for foreign owners, often attracting a further surcharge. Because land tax is a recurring holding cost rather than a one-off transaction cost, lenders factor it into serviceability assessments on investment and commercial property loans, alongside rates, insurance and management costs, when calculating whether net income genuinely covers the proposed facility. Investors holding property across multiple states should be aware that land tax is generally assessed separately in each jurisdiction, and that aggregation rules within a state can also combine the value of several properties held by the same owner, increasing the effective rate. Land tax positions and thresholds should be confirmed with an accountant or the relevant state revenue office rather than assumed to be consistent across the borrower's portfolio.⚠

Related

Commercial property loans · Foreign investor loans · Transfer duty