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In 2023, the NSW Government made important changes to the Principal Place of Residence exemption to mitigate loopholes. If you are a current or prospective NSW landholder, here’s a few key points to keep in mind.


What has changed to the Principal Place of Residence exemption?


Prior to these changes, all landowners in NSW where the owner had Principal Place of Residence could seek an exemption from land tax.

Why change now? Revenue NSW has had concerns about owners with little interest in their land taking advantage of the exemption designed to benefit principal owners.

To close this loophole, owners of land in NSW will not be entitled to a principal place of residence exemption unless all the persons who use and occupy the land as a principal place of residence together own at least a 25% interest in the land.


These changes will impact many NSW landowners such as:

  • Parents who buy houses for their children to occupy (and who hold a greater than 75% ownership interest in the land)
  • Families who own property together where the ownership interests of each family member individually may not reach 25%


When will this impact current or prospective landowners?


  • Landholders who were eligible prior to these updates, may continue to claim the exemption for the 2024 & 2025 land tax years. However, these new rules will come into place from the 2026 land tax year.
  • Owners who purchase property on or after 1 February 2024 and do not meet the minimum ownership requirement will become liable from the 2025 land tax year.


All current and prospective NSW landholders need to be aware of these updates and implement any necessary actions for compliance.


Interested in learning more? Call or click to discuss with a Macro Group team member.

The Macro Group Team


Date: 09/07/2024

The Macro Group Limited AFSL:485843 Tax Agent Number 24 76 5236.

The information in this article  contains general information only. We have not taken into consideration any of your personal objectives, financial situation or needs. Before taking any action, you should consider whether the general advice contained in this communication is appropriate to you having regard to your circumstances and needs, and seek appropriate professional advice if you think you need it. We recommend that you consult a licensed or authorised financial adviser if you require financial advice that takes into account your personal circumstances.


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