Minimum ownership for the principal place of residence land tax exemption

Amendments to the Land Tax Management Act 1956

Land may currently be exempt from land tax where only one of multiple owners occupies the property as a principal place of residence, even in cases where they own only a tiny proportion of the property. Changes to the Land Tax Management Act 1956 (NSW) closed a loophole that enabled individuals with as little as one percent stake in a NSW property to claim the principal place of residence land tax exemption.

Following the amendments, the NSW land tax exemption for the principal place of residence will only be available to a person occupying the property as their principal place of residence who owns an interest of at least 25% in the property.

The transitional provision provides that those who already claim the principal place of residence exemption from land tax but own less than a 25% interest in the land may continue to claim the exemption for the 2024 and 2025 land tax years. The minimum 25% ownership requirement will then apply to those owners from the 2026 land tax year. Existing landowners with less than 25% ownership claiming the PPR exemption have until 31 Dec 2025 to increase their current percentage ownership to 25% or more.

Please speak to your advisor if these changes could impact you.

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