Got an investment property in Rockdale? A holiday unit in Brighton-Le-Sands? Helped your kids buy their first home with a small ownership stake?
Then you need to read this carefully.
NSW land tax is undergoing significant changes for 2026, and some of these rules are catching St George families completely off-guard. After fielding dozens of calls from concerned investors and parents over the past few weeks, I'm breaking down exactly what's changing and what it means for your portfolio.
The Big Changes for 2026
1. Thresholds Are Now Frozen
For years, land tax thresholds adjusted annually with inflation. Not anymore.
| Threshold Type | 2025 & Beyond |
|---|---|
| General Threshold | $1,075,000 (frozen) |
| Premium Threshold | $6,571,000 (frozen) |
What this means: As land values continue rising (and they will), more properties will exceed the threshold each year. Revenue NSW estimates this freeze will bring thousands of additional property owners into the land tax net over coming years.
2. Foreign Owner Surcharge Jumps to 5%
If you're a foreign investor or hold property through certain trust structures, the surcharge land tax rate increased from 4% to 5% from January 2026.
For a property with $1.5 million land value, that's an additional $15,000 annually on top of standard land tax—up from $12,000.
3. The 25% Ownership Rule (This Is the Big One)
Here's where many St George families are getting caught out.
New rule: To claim the Principal Place of Residence (PPR) exemption, you must own at least 25% of the property.
Who this affects:
- Parents who helped kids buy by taking a 10-20% ownership stake
- Divorced couples where one party retained small ownership percentage
- Family arrangements with multiple owners holding minor shares
- Land values high enough that investment properties often exceed thresholds
- Strong rental demand makes holding attractive despite costs
- Limited supply means capital growth prospects remain solid
- You're considering entity restructuring
- You have multiple properties across different ownership structures
- You're uncertain about trust arrangements and surcharges
- You're transferring property between family members
- You need to adjust ownership percentages
- You're concerned about stamp duty on transfers
- You're considering selling to reduce land tax exposure
- You want to understand how this affects your portfolio's value
- You're looking to buy and want to understand holding cost implications
The transition is ending: If you owned less than 25% before February 2024, you had transitional protection for 2024 and 2025. That protection expires in 2026. If your ownership is below 25%, you'll receive a land tax bill from the 2026 tax year onwards.
Real Scenarios I'm Seeing in St George
Scenario 1: The Helpful Parents
John and Mary helped their daughter buy a $1.2 million home in Kogarah in 2022. They took 15% ownership to help with the deposit and loan approval. Their daughter lives there as her principal residence.
Previous situation: PPR exemption applied—no land tax.
From 2026: Land tax bill arrives. Parents own 15% (below 25% threshold). Property has land value of approximately $900,000.
Annual land tax liability: Approximately $3,500+ depending on land value assessments.
Scenario 2: The Investment Portfolio
Sarah owns two investment properties in St George—a unit in Rockdale (land value $320,000) and a house in Bexley (land value $850,000). Combined land value: $1,170,000.
Previous situation: Under old adjusting thresholds, she was borderline.
From 2026: With thresholds frozen at $1,075,000, she's $95,000 over.
Annual land tax: $100 + 1.6% of $95,000 = approximately $1,620
As Bexley land values continue rising, this bill grows each year while the threshold stays static.
📊 Calculate Your Investment Property Costs
Factor in all holding costs including land tax when assessing your investment returns.
Calculate Selling Costs →St George Land Values: What You're Dealing With
Here's a snapshot of typical land values across our region (these determine your land tax, not property prices):
| Suburb | Typical House Land Value | Typical Unit Land Value |
|---|---|---|
| Brighton-Le-Sands | $1.3-1.8M | $250-400K |
| Sans Souci | $1.4-2.0M | $280-450K |
| Rockdale | $900K-1.3M | $180-320K |
| Kogarah | $950K-1.4M | $200-350K |
| Bexley | $850K-1.2M | $170-280K |
| Banksia | $800K-1.1M | $160-260K |
| Kingsgrove | $900K-1.2M | $180-290K |
Key insight: A single investment house in premium St George suburbs can push you over the $1,075,000 threshold alone. Unit investors typically need 3-4 properties before land tax kicks in.
Strategies to Consider
For Parents Who Helped Kids Buy
Option 1: Transfer ownership to your child If your child can refinance without your guarantee, consider transferring your share. You'll pay stamp duty on the transfer, but eliminate ongoing land tax liability.
Option 2: Increase your ownership to 25%+ If you hold 20%, buying an additional 5%+ from your child keeps the PPR exemption alive. Run the numbers—stamp duty on 5% transfer vs annual land tax.
Option 3: Accept the land tax If ownership restructure is impractical, factor land tax into your family's financial planning.
For Investment Property Owners
Option 1: Portfolio review Consider whether holding multiple St George properties makes sense versus diversifying into other assets. Land tax only applies to NSW real estate.
Option 2: Entity restructuring Some investors benefit from holding property through different structures. Speak to your accountant—this is complex and situation-specific.
Option 3: Time your purchases strategically Land tax is assessed on December 31 each year. Settlement timing can affect which tax year a new purchase falls into.
🧮 Calculate Capital Gains on Potential Sales
Thinking about restructuring your portfolio? Understand the CGT implications first.
Calculate Capital Gains →How Land Tax Is Actually Calculated
Let me walk through the maths because I find many investors don't fully understand this.
Step 1: Determine your total taxable land value Add up the unimproved land values of all your NSW investment properties (excluding your principal residence).
Step 2: Apply the three-year average Revenue NSW uses a rolling three-year average of land values, which smooths out fluctuations.
Step 3: Compare against thresholds
| Land Value Range | Calculation |
|---|---|
| Below $1,075,000 | No land tax |
| $1,075,000 - $6,571,000 | $100 + 1.6% of value above $1,075,000 |
| Above $6,571,000 | $88,036 + 2% of value above $6,571,000 |
Example: Combined land value: $1,500,000 Taxable amount: $1,500,000 - $1,075,000 = $425,000 Land tax: $100 + (1.6% × $425,000) = $6,900 per year
Important Dates for 2026
| Date | What Happens |
|---|---|
| 31 December 2025 | Land ownership assessed for 2026 tax year |
| 15 December 2025 | Request 2026 clearance certificates |
| 19 January 2026 | Revenue NSW starts issuing 2026 assessments |
| Within 60 days of assessment | Pay in full for 0.5% discount |
If you're settling on a property in early 2026, request an early assessment to ensure clearance before settlement.
The Bigger Picture: Why This Matters for St George
The NSW government raised approximately $4.1 billion from land tax in 2023-24. With thresholds frozen while property values climb, this figure will grow substantially.
For St George specifically, our region sits in a challenging position:
My view? Land tax is a holding cost like council rates or insurance. Factor it into your investment calculations, don't ignore it, and make informed decisions about portfolio composition.
When to Seek Professional Advice
This article provides general information, but your situation may require specialist input:
Speak to an accountant if:
Speak to a solicitor if:
Speak to a property expert if:
Need to Discuss Your St George Investment Properties?
Whether you're reviewing your portfolio or considering selling, I'm happy to provide a market assessment.
Request Free Appraisal →Frequently Asked Questions
Q: Does land tax apply to my home? No—your principal place of residence is exempt, provided you meet the ownership requirements (25%+ from 2026).
Q: Can I claim land tax as a deduction? Yes, land tax on investment properties is generally tax-deductible as a holding cost.
Q: What if I disagree with my land value assessment? You can lodge an objection with the Valuer General within 60 days of receiving your land value notice.
Q: Is there a payment plan available? Yes, Revenue NSW offers interest-free payment plans up to 9 months if you can't pay in full.
Michael Kalinovski specialises in St George investment properties with 25+ years local experience. For property valuations or investment advice, contact 0411 LAU 888 or visit michaelkalinovski.com/contact.
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