Stamp Duty vs Land Tax for Investment Properties: 2025-26 Guide
6 August 2026 · 8 min read · General information only
Why the stamp duty vs land tax question matters in 2025-26
If you’re buying an investment property in Australia, the upfront cost of stamp duty is impossible to ignore. In NSW, Victoria and Queensland, duty on a $800,000 investment property can easily top $30,000. But once you own the property, you’ll also face an annual land tax bill in most states — and that recurring cost is often the one buyers forget to budget for.
In 2025-26, several states have tweaked their land tax thresholds and rates, making it more important than ever to run the numbers before you sign. This guide explains how stamp duty and land tax differ, how they’re calculated in each state, and how to use our stamp duty calculator to estimate the upfront hit.
Stamp duty: the one-off cost at purchase
Stamp duty (officially ‘transfer duty’ in most states) is a tax you pay when you buy property. For investment properties, you generally can’t claim a concession — you’re paying the full rate.
Here are the key points for 2025-26:
- It’s a lump sum — you pay it at settlement, usually within 30–90 days of exchange.
- It’s based on the purchase price (or market value, whichever is higher in some cases).
- Rates are progressive — the more you pay, the higher the marginal rate.
- It’s not deductible for tax purposes, but it’s added to the property’s cost base for capital gains tax (CGT) when you sell.
Example: For a $800,000 investment property in NSW, stamp duty is approximately $31,490 (2025-26 rates). In Victoria, it’s about $43,000 for a non-principal place of residence (including the surcharge for investors). In Queensland, it’s around $21,350.
Use our calculator to get the exact figure for your state and price.
Land tax: the annual recurring cost
Land tax is an annual tax on the unimproved value of land you own, excluding your principal place of residence (PPR) in most states. Investment properties, holiday homes, and vacant land are all subject to it once the total taxable land value exceeds your state’s threshold.
Key features for 2025-26:
- It’s based on land value only — not the building or improvements.
- It’s calculated annually — usually billed at the end of the year, based on valuations from the previous year.
- It’s deductible as an investment expense against your rental income.
- Thresholds are per person — if you own multiple properties, the values are aggregated, so you may cross the threshold sooner than you think.
State-by-state thresholds and rates (2025-26)
Here’s a snapshot of the general land tax thresholds and rates for investment properties in the major states. Note that some states have different rates for trusts or companies.
| State | General threshold | Rate above threshold |
|---|---|---|
| NSW | $1,075,000 | $100 + 1.6% of excess |
| Victoria | $300,000 | 0.2% – 2.65% (progressive) |
| Queensland | $600,000 | 1% – 1.75% (progressive) |
| Western Australia | $350,000 | 0.25% – 2.67% (progressive) |
| South Australia | $500,000 | 0.5% – 2.1% (progressive) |
| Tasmania | $25,000 | 0.55% – 2% (progressive) |
| ACT | $0 (all land) | 0.49% – 1.89% (progressive) |
| Northern Territory | No land tax | – |
Note: These are general rates for individuals. Always check your state revenue office for the latest figures.
For example, if you own land valued at $900,000 in Queensland, you’ll pay land tax of about $3,000 (1% on the $300,000 above the $600,000 threshold). In NSW, with land valued at $1.2 million, you’d pay roughly $2,100.
How to compare the two costs for your investment
To decide whether an investment property is worth it, you need to look at the total cost of ownership. Here’s a practical way to compare:
- Calculate stamp duty using our stamp duty calculator – enter the purchase price and state to get the exact amount.
- Estimate your land tax – get the site value from the council or state revenue office, then apply the threshold and rate for your situation.
- Spread the stamp duty over your expected holding period – e.g., $30,000 over 10 years = $3,000 per year.
- Add the annual land tax to that figure.
- Compare the total annual cost against your rental yield and other expenses.
Example: An $800,000 NSW investment property with $31,490 stamp duty and land valued at $700,000 (below the NSW threshold, so no land tax) – the annualised stamp duty cost over 10 years is $3,149. If you sell after 5 years, it’s $6,298 per year, which could wipe out a chunk of your rental return.
Strategies to minimise the impact
- Buy in a state with no land tax – the NT has no land tax, but property prices may be lower for a reason.
- Stay under the threshold – if you’re close to the land tax threshold, consider buying a property with a smaller land component (e.g., a unit or townhouse) to avoid crossing it.
- Use a trust or company structure? – beware: some states have higher rates or no threshold for trusts. Get professional advice.
- Hold longer – stamp duty is a fixed cost, so the longer you hold, the lower the annualised impact.
- Claim land tax as a deduction – it’s an investment expense, so it reduces your taxable income.
The bottom line
Stamp duty is a big upfront cost, but land tax can quietly eat into your returns every year. In 2025-26, with property prices still high in many areas, it’s easy to underestimate the ongoing tax burden. Use our stamp duty calculator to get the exact upfront figure, then factor in land tax to see if the investment stacks up.
This is general information only, not financial advice.