A land tax clearance certificate is issued by Revenue NSW and shows whether any land tax is owing on a property. The buyer's conveyancer usually orders it before settlement, because unpaid land tax can stay attached to the land, and if tax is owing, it is normally paid from the seller's proceeds at settlement.
Who needs to think about land tax?
Land tax in NSW is generally charged on land you own above a threshold, other than your principal place of residence and some other exempt land. It most often affects:
- Investment properties
- Holiday homes
- Vacant land
- Some properties owned by companies or trusts
Your own home is usually exempt, but a clearance certificate is still commonly ordered so the buyer can confirm nothing is owing.
What happens at settlement
| Situation | What happens |
|---|---|
| No land tax owing | The certificate confirms it, and nothing more is needed |
| Land tax owing | The amount is paid to Revenue NSW from the seller's funds at settlement |
| Land tax adjustment in the contract | The amount may be shared between buyer and seller under the contract terms |
For sellers of investment property
If you own an investment property, check your land tax position before you list. Unexpected land tax can reduce what you receive at settlement.
Common questions
FAQs
Who orders the land tax clearance certificate?
Usually the buyer's conveyancer.
Do I pay land tax on my home?
Your principal place of residence is generally exempt, subject to Revenue NSW's rules.
What if land tax is unpaid at settlement?
It is usually paid from the sale proceeds so the buyer takes the land free of it.
Sources: Revenue NSW: land tax
City Peak Conveyancing acts on NSW property only. This page is general information, not advice about your circumstances.