NSW vs Victoria: Land Tax Comparison
Considering buying investment property in Sydney or Melbourne? Land tax is an ongoing annual cost that can significantly impact your investment returns. Compare what you'd pay in each state.
Victoria's land tax threshold dropped to just $50,000 from 2024, while NSW maintains a much higher threshold of $1,075,000. This means Victoria investors typically pay more land tax, but NSW has higher overall property prices which can offset this advantage.
When enabled, changing the land value in one scenario will update the other.
New South Wales
Victoria
How to use this comparison
- Enter your land value — Use the unimproved land value from your council rates notice or the Valuer General website.
- Adjust ownership settings — Select individual or trust ownership (for Victoria), and your residency status.
- Compare the results — See the annual land tax difference between the two scenarios.
The calculator will automatically sync land values between scenarios so you can compare like-for-like. Toggle this off if you want to compare different portfolio values.
Frequently asked questions
Which state has lower land tax, NSW or Victoria?
NSW generally has lower land tax due to its much higher threshold ($1,075,000 vs $50,000 in Victoria). A property with $500,000 land value pays nothing in NSW but $975 in Victoria. However, NSW property prices are often higher, so actual tax bills can be similar for equivalent properties.
Why is Victoria land tax threshold so much lower?
Victoria reduced its land tax threshold from $300,000 to $50,000 from 1 January 2024 as part of COVID debt recovery measures. This brought approximately 360,000 additional landowners into the land tax system.
Does Victoria have different rates for trusts?
Yes, Victoria has separate (higher) rates for properties held in trusts, with an even lower threshold of $25,000. NSW does not distinguish between individual and trust ownership for land tax purposes.
What about foreign/absentee owner surcharges?
Both states have surcharges. NSW charges foreign owners a 5% surcharge on total land value (no threshold). Victoria charges absentee owners a 4% surcharge on land value above $50,000. The definitions of "foreign" and "absentee" differ between states.
How does land tax affect investment returns?
Land tax is an annual holding cost that reduces your net rental yield. At higher land values, Victorian land tax can be 0.5-2% of land value annually, while NSW investors below the threshold pay nothing. Factor this into your investment analysis.