Land tax in the year you sell

Victoria: the threshold and what it covers

Consumer Affairs Victoria’s page for sellers sets out the rule. From 1 January 2024, a seller must not pass land tax on to a buyer in a contract of sale when the price is below the ‘threshold amount’. The threshold for the year starting 1 January 2026 is $10,700,000, and it rises each year with inflation. The State Revenue Office gives the starting point as $10 million, indexed each year from 1 January 2025, and under Victoria’s Sale of Land Act 1962 the Director of Consumer Affairs must publish each year’s figure on or before 1 December of the year before.

The State Revenue Office reads the ban widely: it covers land tax including vacant residential land tax, interest and penalty tax, whether by apportioning it or passing it on. The same Act also names the commercial and industrial property tax alongside land tax.

Windfall gains tax

From 1 January 2024, a seller must not pass a known windfall gains tax liability on to the buyer under a contract of sale or an option agreement. A liability is known when it has been assessed and served before the contract is signed. The State Revenue Office says a seller may build the cost into the price instead, and that this amount then counts as part of the price, which changes the duty the buyer pays. Unpaid at settlement, the liability remains the seller’s, though the tax is also secured by a charge on the land.

The property clearance certificate

On the day it is issued, a property clearance certificate shows any unpaid land tax owing on the land, with vacant residential land tax, interest and penalty tax counted in. Unpaid land tax is a first charge on the land: it ranks ahead of a mortgage and stays with the land when ownership changes, so a buyer may become liable for it. The protection belongs to a buyer who gets their own certificate; relying on one the seller obtained offers none. For the seller, a certificate does not end the matter: the Commissioner may still recover land tax from the vendor, including an amount the certificate shows. And a certificate showing nothing owed means nothing is owed on that date, not that the land is exempt.

New South Wales: a certificate before settlement

Land tax in NSW is an annual tax on owners, based on the value of the land they own, and you may have to pay it if your landholding is above the threshold.

Revenue NSW’s page for sellers asks you to give the buyer a copy of the clearance certificate at least 14 days before settlement, and, where your land tax assessment notice will already be overdue when settlement comes, to obtain a settlement letter. NSW Fair Trading’s page for buyers explains why the buyer cares: the certificate confirms whether land tax is outstanding on the property, and land tax the seller still owes may need to be paid as part of settlement.

Tasmania: a search certificate, and an agreement

Tasmania’s State Revenue Office describes what a land tax search shows each side. For the seller and the buyer, it gives the land tax payable on the property for the financial year at the single rate, which helps them work out, where they agree, how much the seller can recover from the buyer at settlement. For the seller alone, it gives all land tax outstanding on the property being sold and on every other property on the seller’s land tax account, and that amount must be paid before the sale or transfer is finalised.

South Australia

South Australia’s settlement page describes land tax as an annual state tax, and notes that a home bought as the buyer’s principal place of residence may be exempt. The page read for this guide does not say how land tax is shared in the year of a sale.

Other lines in the same settlement

Land tax is one of several amounts settled on the day. Council rates are covered in adjustments at settlement, and the federal withholding in the clearance certificate every seller needs. The full trail is on the home page of this guide.