Land tax at settlement in New South Wales: the section 47 certificate

In this article

Written by

Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

About Kooky and Shaka →

Land tax in New South Wales is a bill addressed to an owner, yet the debt is tied to the land itself. That single feature explains a document Revenue NSW says is required for the settlement of a property sale: the land tax clearance certificate, also called the section 47 certificate. A buyer who settles without reading it can take over a property that still carries the previous owner's unpaid tax.

This guide follows what Revenue NSW, the state's revenue office, publishes on the subject. It covers what the certificate shows, who applies and when, what happens when it shows a charge, the thresholds and rates for the 2026 land tax year, the principal place of residence exemption and its rules for people moving in or out, the surcharge on foreign owners, and what the official pages say about adjusting land tax between seller and buyer. Two points the pages read for this guide do not state are named as such: the fee for a certificate and the surcharge rate.

Revenue NSW land tax pages, last updated between March and June 2026.

A tax on the owner that stays with the land

Revenue NSW describes land tax as a state tax charged on the value of unimproved land, meaning the land without its buildings and other improvements. The values come from the NSW Valuer General each year. The tax is worked out for a land tax year, and the Revenue NSW page on the home exemption gives the taxing date as 31 December.

The part that matters at settlement is on the Revenue NSW page explaining land tax clearance. Unpaid land tax, it says, is a first charge on the land. A charge of this kind does not disappear when the owner changes. The page spells out the consequence: a new owner can be liable for the unpaid amount, including interest and penalties, and if the tax is not paid by settlement the buyer can be held liable after taking ownership.

So a purchaser in New South Wales has a direct interest in a tax bill that was never issued in the purchaser's name. The seller may own several properties, may dispute an assessment, or may simply have a notice that has not yet fallen due. None of that is visible from the contract price or from a title search alone. The clearance certificate is the document that makes it visible.

What the section 47 certificate shows

The certificate is issued under section 47 of the Land Tax Management Act 1956, the New South Wales statute that governs how land tax is administered. According to Revenue NSW, it shows the property identifiers, which are the lot number, the plan number and the street address, and whether land tax is owed on that land.

There are two possible results. A clear certificate shows no charges. The other kind shows a charge, which means land tax is recorded as unpaid against the property on the day the certificate is produced.

Revenue NSW's release on preparing for the 2026 land tax year, published on 13 November 2025, adds a detail about what a clear result does and does not do. A certificate showing no charge protects the purchaser. It does not release the vendor from liability. In other words the document settles the position of the land for the buyer's benefit; whatever the seller owes as a taxpayer remains the seller's debt to the state.

One certificate does not always cover a whole sale. The Revenue NSW application page says each certificate covers up to three lots in a strata plan, so a sale of more than three lots needs more than one. For land that was newly subdivided, the clearance page says a current certificate for the parent property, as it stood before the subdivision, can be acceptable.

Who applies, how and when

Revenue NSW states that a clearance certificate is required for the settlement of a property sale and that landowners selling property in the state must apply for one. In practice, the page says, this is generally handled by the seller's solicitor or conveyancer. Applications go through one of three commercial service providers named on the Revenue NSW page. The pages read for this guide do not describe a way for a member of the public to order a certificate directly from Revenue NSW.

Timing is fixed from the settlement date backwards. A seller under contract must give the buyer a current certificate at least 14 days before settlement. Revenue NSW defines "current" in two ways: the certificate was issued for the year in which settlement occurs, or it was issued no more than three months before the date it must be given to the buyer. The 2026 preparation release frames the same period from the applicant's side, asking that applications be submitted at least 14 days before the scheduled settlement date. The application page simply says to apply as early as possible in the conveyancing process.

Certificates are generally fulfilled immediately, according to the application page. Where an error appears on a certificate, Revenue NSW investigates and resolves it, and the existing certificate can then be updated or a copy obtained.

This is where the buyer's conveyancer comes in. Revenue NSW tells buyers to check that the seller's certificate covers the current land tax year, and recommends that the buyer apply for a certificate if it does not. Buyers are allowed to apply in their own right. A certificate ordered by the buyer's side close to settlement shows the position of the land for the year in which the property changes hands, which is the year the buyer would otherwise inherit.

On the fee: none of the Revenue NSW pages read for this guide states the amount charged for a section 47 certificate, and none says whether the service providers add a fee of their own. The figure is therefore left out here.

When the certificate shows a charge

A charge on a certificate is not a reason for a sale to stop. It is a signal that one more document is needed. Revenue NSW's application page says that when a land tax charge appears, the seller must contact Revenue NSW to arrange the release of the charge. The 2026 preparation release notes that clearing a charge may take up to 10 business days, which is most of the 14 days between the handover deadline and settlement.

The clearance page lists what must accompany a certificate that shows a charge. Which document applies depends on where the seller's assessment stands on the settlement date.

The preparation release puts the buyer's side of this in one rule. At settlement the purchaser must receive either a certificate showing no charge, or a certificate showing a charge together with the assessment notice if its due date has not passed, or a settlement letter or clearance quote if it has. The charge is removed once the amount shown is paid.

For the buyer, the clearance page reduces the task to a check: confirm that the certificate shows no outstanding charges at settlement, or that any charge shown has been paid as part of settlement. A seller who has paid, or otherwise cleared the tax, can obtain an updated certificate through the clearance certificate updates form, and the clear version is what the buyer's side then holds on file.

What if neither happens? The Revenue NSW page is direct. If the tax is unpaid, payment should be arranged before or at settlement. If it is not paid by settlement, the buyer can be held liable after taking ownership, for the tax and for the interest and penalties attached to it.

Settlements in December, January and February

The turn of the year is the awkward season for this paperwork, because one land tax year closes and the notices for the next have not yet gone out. The dates Revenue NSW published for the 2026 land tax year show how the calendar ran. Section 47 certificates for the new year could be requested through the service providers from Monday 15 December 2025. Assessment notices started to be issued from Monday 19 January 2026.

A sale settling in that window can therefore meet a certificate showing a charge for a year in which the seller has not yet received a bill. The release sets out the route for that case: where settlement falls in January or February, the seller can request an urgent assessment notice, also described as an early issue. Receiving it by email requires the owner to have opted in to land tax email communications.

Thresholds and rates for the 2026 land tax year

Whether a seller owes land tax at all depends on the thresholds. Revenue NSW's thresholds and rates page, last updated on 16 March 2026, gives a general threshold of A$1,075,000 and a premium threshold of A$6,571,000 for the 2026 land tax year. Both figures are the same as in 2024. The page explains why: the 2024-2025 State Budget announced a freeze on the general and premium thresholds for land tax years after 2024, and the thresholds are fixed from 1 January 2025. Before that they moved every year.

The rates sit on top of those thresholds. For land value above the general threshold and below the premium threshold, the tax is A$100 plus 1.6% of the land value above A$1,075,000. For land value above the premium threshold, it is A$88,036 plus 2% of the land value above A$6,571,000. The two formulas join exactly: 1.6% of the A$5,496,000 between the two thresholds is A$87,936, and adding the A$100 gives the A$88,036 at which the premium formula starts.

The value tested against the threshold is not a single year's valuation. Revenue NSW averages three years of land values and compares the average with the threshold. Its page also sets limits on who receives the threshold: the tax-free threshold does not apply to land owned as part of special or discretionary trusts, and owners holding property through certain trusts or related companies may not qualify for it.

What the formula gives: worked examples

Revenue NSW's own example uses three yearly land values of A$1,050,000, A$1,100,000 and A$1,150,000. Their average is A$1,100,000, which is A$25,000 above the general threshold. The tax is A$25,000 multiplied by 1.6%, or A$400, plus A$100: A$500 for the year.

The three further cases below are worked examples computed for this guide from the same published formulas. Each assumes an individual owner entitled to the threshold, no exemption, and a three-year average land value equal to the figure shown. At A$1,500,000 the excess over the general threshold is A$425,000, so the tax is A$6,800 plus A$100, or A$6,900. At A$3,000,000 the excess is A$1,925,000, giving A$30,800 plus A$100, or A$30,900. At A$7,000,000 the premium formula applies: the excess over A$6,571,000 is A$429,000, 2% of which is A$8,580, and adding A$88,036 gives A$96,616.

These amounts show the scale of what a charge on a certificate can represent, and why the difference between a paid and an unpaid notice is checked rather than assumed. The payment terms explain how a notice can still be open on settlement day without anyone being late. For 2026, Revenue NSW offered a 0.5% discount for payment in full within 60 days of the issue date, or an interest-free payment plan of up to nine months. In the A$1,500,000 worked example, the discount would be A$34.50 on a bill of A$6,900. A seller part-way through an instalment plan has a notice that is not yet paid in full, and the clearance page allows an assessment notice to accompany a charged certificate only when it is paid in full.

The home exemption and its 25% ownership test

A home that its owner lives in is generally outside land tax through the principal place of residence exemption. Revenue NSW defines a principal place of residence as the one place a person primarily lives, in Australia or overseas, and only one property worldwide can hold that status for an owner. It can be residential land or a strata lot. The owner must be a natural person: land owned wholly or partly by a company, or held in a special trust, generally does not qualify. Only one exemption can be claimed per family.

An ownership test was added in 2024. The 2026 preparation release says that from 1 February 2024 the exemption can be claimed only by occupants who hold at least a 25% ownership interest, alone or collectively, and that owners who already claimed it before the change were covered by a transitional provision. From the 2026 land tax year, where all the occupants together own less than 25%, the exemption no longer applies. The release gives examples on each side of the line. One occupant owning 30% qualifies, as do two occupant-owners with 15% and 20%. A sole occupant owning 10% does not, nor do two occupant-owners with 5% and 15%. Revenue Ruling LT 082, in its sixth version, is the reference given.

There is also an occupation test tied to the calendar. The property must have been used and occupied solely for residential purposes since 1 July before the taxing date of 31 December. A buyer who settles after 1 July, or who starts or resumes living in the property after that date, is not shut out: the exemption can still apply if the Chief Commissioner of State Revenue is satisfied the property is the owner's principal place of residence on the taxing date.

Small departures from purely residential use are tolerated. Letting one room, one flat or one suite of rooms, among the other excluded residential occupancies listed by Revenue NSW, leaves the exemption intact, and letting more may leave a partial exemption.

Moving in or out around settlement

Settlement dates rarely line up with 31 December, so the exemption comes with concessions for people between homes. Each has its own clock.

The first row is the one closest to a settlement. Someone who still owns the previous home on 31 December may have the concession on both properties for one land tax year. The new home must be used only as the owner's principal place of residence, unless tenants were already there under an existing lease at possession. The former home must have had no residents other than the owner between 1 July and 31 December before the taxing date and must have earned no income, apart from excluded residential occupancies and arrangements made with the buyer before settlement, such as leasing the property to the buyer ahead of completion.

The building concession carries five conditions on the Revenue NSW page: the owner and family do not own and occupy another principal residence; the owner lives in the property continuously for at least six months after construction is complete; the property generates no income once work starts; the land is used only for lawful purposes; and local planning laws do not allow more than two residences or residential units on the land. If tenants occupy the property when ownership is taken, the concession starts only after they leave. The extension from four years to as many as six is available where a delay arose from exceptional circumstances beyond the owner's control.

An owner who moves out and lets the home can keep the exemption for up to six years, provided the income is limited to basic expenses such as rates, water and amenities, or the property is not leased for more than six months in a calendar year. Where it is leased for longer, land tax applies the following year unless the owner moves back before 31 December. The six-year limit does not apply to an owner in full-time care, which Revenue NSW defines to include a hospital patient and a resident of an aged care facility.

None of this is automatic. Revenue NSW says the exemption is claimed by lodging a return in Land Tax Online by 31 March, or by the due date on the notice of assessment, with documents covering every year claimed. Utility bills in the owner's name showing usage, home and contents insurance, removalist invoices and licence address history are accepted. Council rates, water rates and home insurance without contents cover are not. Revenue NSW reviews exemptions for the past five years, and an owner who stops being eligible is expected to remove the exemption from the record.

The foreign owner surcharge in one paragraph

Foreign persons who own residential land in New South Wales must pay surcharge land tax, Revenue NSW states, unless an exemption applies. The thresholds and rates page adds that the surcharge has its own rates and that the general and premium thresholds do not apply to it, so the tax-free amount available for ordinary land tax offers no shelter. Owners who are not Australian citizens, or who hold certain visas, are required to keep their foreign status up to date with Revenue NSW. The exemptions listed are a principal place of residence exemption for the home the owner lives in most of the time, subject to residency requirements, and exemptions for Australian-based developers, residential land used for commercial purposes and build-to-rent projects. The Revenue NSW pages read for this guide do not give the surcharge rate for 2026 or the test that decides who is a foreign person, so neither is stated here.

How land tax is adjusted between seller and buyer

A seller may have paid land tax for a year in which the buyer owns the property for part of the time. On how that is shared, the official position is short. Revenue NSW's clearance page says that how land tax is adjusted between buyer and seller is set out in the contract of sale. Revenue NSW does not set or influence those terms, and the page says a solicitor or conveyancer should review them.

Three consequences follow from that wording. First, there is no statutory formula on the Revenue NSW pages for sharing the year's land tax: whether an adjustment is made, on what amount and for which days is a matter of the contract the parties signed. Second, an adjustment and a clearance are separate things. The adjustment moves money between seller and buyer on the settlement figures; the clearance concerns whether the state still holds a charge over the land. A sale can have a generous adjustment clause and an uncleared charge, or the reverse. Third, the exemption position of each side is its own affair. A seller may be taxed on the property as an investment while the buyer will live in it and claim the home exemption for a later year, or the other way round.

The buyer's work also continues after the keys change hands. Revenue NSW notes that after settlement buyers may need to lodge a return to update their land tax details or to claim an exemption or concession. For a purchaser who already owns other land in the state, the new property joins the total tested against the A$1,075,000 threshold, using the three-year average of the Valuer General's values. For a purchaser moving in, the 1 July and 31 December dates of the home exemption decide whether the first taxing date after settlement brings a bill or not.

Kooky, from Shaka

Kooky edits Agents Estate and builds Shaka, the payment router he made for real estate professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

About Kooky and Shaka →