The Revenue Legislation Amendment Bill 2024 introduces significant updates to land tax thresholds, surcharge rates, and exemption criteria in New South Wales. These changes will impact property owners, investors, and foreign landholders from 1 January 2025.
1. Land Tax Threshold Freeze
From 1 January 2025, land tax thresholds will be fixed at the following values:
- • General threshold: $1,075,000
- • Premium threshold: $6,571,000
These amounts will remain unchanged for future tax years, ensuring consistency in land tax calculations. The NSW Treasurer will review these thresholds by 1 June 2027 to assess their relevance based on property market conditions.
2. Increase to Surcharge Land Tax for Foreign Owners
Foreign investors will see a rise in the surcharge land tax rate from 4% to 5%, effective 1 January 2025.
- • Impact: From 2025, the surcharge will be calculated at 5% of the total taxable land value for foreign-owned residential properties.
This change aims to align taxation policies with foreign investment regulations and property market dynamics.
3. Changes to Principal Place of Residence (PPR) Exemption
From 1 February 2024, property owners seeking a PPR exemption must meet the following conditions:
- • Own at least 25% of the property (individually or jointly)
- • Meet PPR eligibility requirements
Key Dates & Transitional Rules:
- • Owners who do not meet the 25% ownership threshold will become liable for land tax from 1 January 2025.
- • Owners eligible before 1 February 2024 with less than 25% ownership can continue claiming the exemption for 2024 and 2025, but will become liable from 2026.
- • If an owner believes they were eligible but were not receiving the exemption, they may lodge a return via Land Tax Online.
What This Means for Property Owners
These legislative changes highlight the importance of reviewing your property portfolio and tax liabilities. Property owners are encouraged to:
- ⎫ Assess their land tax position based on the new fixed thresholds
- ⎫ Review foreign ownership status and prepare for the increased surcharge
- ⎫ Ensure compliance with the revised PPR exemption requirements
For detailed information, visit the NSW Revenue Office website.
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