Land Tax in Australia varies by state and varies significantly depending on the underlying land value, and the structure or entity that owns the property.

Recently (this blog post is dated January 2026) land tax has become a significant holding cost for many proeprty investors because of:

• large property value increases
• significant land re-zoning by Local governments
• legislated land tax increases by State governments.

Land tax as a holding cost impacts the Net Yield return on an investment property. Property investors must always consider the net yield when calculating the ROI (Return on Investment) of an investment property.  Land tax is always excluded from the gross yield figures often quoted by real estate agents. 

It’s imperative you consult with Rider Accountants & Advisors the investment property tax accounting advisory firm to correctly structure your investment property purchase.  There may be some ways to reduce or eliminate land tax:

1. Where land is used primarily as a boarding house, an exemption from land tax or a reduction in the taxable land value of the land is available if the land is primarily used to provide boarding house accommodation in accordance with guidelines approved by the Treasurer.
2. Structuring the ownership entity with a combination of companies and trusts.
3. Principal Place of residence (PPOR)
4. Certain “Concessional Trusts”.