NSW Investment Property Conveyancing
NSW investors face land tax above $1.075m, surcharge land tax for foreign owners and trusts, and complex structuring decisions. Get the conveyancing right from day one.
Quick Answer
NSW property investors face several legal and tax considerations beyond standard conveyancing. Land tax applies above the 2026 threshold of around $1.075 million in unimproved land value (combined across all NSW properties owned by the same legal entity), at 1.6% + $100 per $100K above the threshold (rising to 2% above $6.571m). Properties held in discretionary trusts pay land tax from the first dollar with no threshold (and 5% surcharge land tax for any trust with foreign beneficiaries — every standard family trust deed unless excluded). SMSF purchases require Limited Recourse Borrowing Arrangement (LRBA) and a bare trust structure. Depreciation schedules from a quantity surveyor should be obtained immediately after settlement to maximise first-year deductions. Settlement timing can be coordinated to maximise the depreciation low-value pool and prepayment deductions.
Choosing the right purchaser entity
Before signing a NSW investment property contract, decide who will be on title. Common structures:
- Individual name (sole or joint) — simplest. Negative gearing offsets personal income at marginal tax rates. Land tax threshold $1.075m. CGT 50% discount on individual gains held >12 months.
- Discretionary (family) trust — flexibility to distribute income to lowest-taxed beneficiaries. NO land tax threshold (pays from $1). Cannot negatively gear against personal income. Foreign-beneficiary surcharge applies unless the trust deed expressly excludes foreign beneficiaries.
- Self-Managed Super Fund (SMSF) — purchase via Limited Recourse Borrowing Arrangement and a bare trust (custodian) structure. CGT 15% (or 10% if held >12 months) and 0% in pension phase. Cannot live in or rent to related parties.
- Company — flat 25% (or 30%) tax rate. NO 50% CGT discount. NSW land tax threshold applies. Useful for commercial property and short-term holds.
- Unit trust or hybrid trust — used for joint ventures and partnerships with unequal contributions. More complex tax treatment.
NSW land tax for investors
Land tax is a major NSW investor consideration. Key 2026 facts:
- General threshold: ~$1.075 million in combined unimproved land value (CPI indexed annually).
- Premium threshold: ~$6.571 million.
- Rate: 1.6% + $100 on land value between general and premium thresholds; 2% above premium threshold.
- Trusts (other than fixed unit trusts and SMSFs): NO land tax threshold — pays from $1.
- Foreign person surcharge: 5% on full unimproved land value, additional to standard land tax.
- Principal place of residence exemption: full exemption regardless of land value.
- Land tax assessed at 31 December each year — buying just before vs just after can save a year of land tax.
Settlement timing and tax outcomes
We work with investors and their accountants to time settlement strategically. Examples:
- Settle before 30 June: full year of depreciation, interest, and rates deductions in the current financial year.
- Settle after 30 June: deductions push into next year — useful if current year income is already high.
- Settle before 31 December: land tax for next year is assessed against the previous owner. Buyer avoids one year of land tax.
- Settle after 31 December: buyer is liable for the next year's land tax. Adjust price/conditions accordingly.
- Settle before depreciation report cutoffs to capture the maximum first-year low-value pool deductions.
NSW Investment Structure Comparison
Indicative tax positions for the most common NSW property investment structures.
| Structure | Land Tax Threshold | CGT Discount | Negative Gearing |
|---|---|---|---|
| Individual / joint | $1.075m | 50% (held >12 mo) | Yes (against personal income) |
| Family trust | $0 (no threshold) | 50% (passed to individual beneficiaries) | No (losses trapped in trust) |
| SMSF (LRBA) | Threshold applies | 33% / 0% pension | No (against fund income only) |
| Pty Ltd company | $1.075m | Nil | Yes (against company income) |
| Foreign person | $1.075m + 5% surcharge | Same as resident | Yes (against AUS income) |
Always obtain advice from your accountant before deciding on entity. Trust deeds may need foreign beneficiary exclusion clauses to avoid 5% surcharge.
How a NSW Investor Buys Property Compliantly
Pre-purchase: confirm structure with accountant
Decide individual / joint / trust / SMSF / company before signing the contract. Changing the named purchaser after exchange triggers double duty.
Contract review with investment lens
Conveyancer reviews tenancy provisions, vacancy, rental guarantees, lease assignments, and any restrictions on use as investment.
Coordinate settlement timing
Discuss with accountant whether to settle before/after 30 June and 31 December for tax outcomes.
Trust deed / bare trust setup (if applicable)
If using a trust or SMSF, ensure the structure is established BEFORE exchange. Trust deed must be stamped with NSW Revenue NSW (negligible duty).
Stamp duty calculation
Conveyancer calculates duty, surcharge purchaser duty (if foreign), and any concessions. Investors generally do not qualify for first home buyer exemption.
Settle via PEXA
Settlement coordinated with lender, vendor, and (if applicable) bare trust custodian.
Post-settlement: depreciation and land tax registration
Engage a quantity surveyor for a depreciation schedule. Register for land tax with Revenue NSW within 30 days.
Frequently Asked Questions
Common NSW questions answered by Elyment Conveyancing — written for buyers, sellers, and investors.
Approximately $1.075 million in combined unimproved land value owned by the same legal entity. Above the threshold, land tax is 1.6% + $100 per $100K. Premium threshold around $6.571m at 2%. Indexed annually.
Trusts offer income distribution flexibility but lose the $1.075m land tax threshold (pay from $1) and cannot negatively gear against personal income. Trusts work well for high-income earners with multiple properties; less well for first investments. Get accountant advice.
Yes, via a Limited Recourse Borrowing Arrangement (LRBA) and bare trust (holding trust). The SMSF cannot live in or rent the property to related parties. Strict ATO rules apply. Conveyancing involves the bare trust deed and custodian structure.
Possibly. If your trust deed allows distributions to a foreign person — even theoretically — the trust is treated as foreign and pays 9% surcharge purchaser duty + 5% surcharge land tax. The deed must EXPRESSLY exclude foreign beneficiaries to avoid this.
Land tax liability is determined as at midnight 31 December each year. Settlement before 31 December means the previous owner is liable for next year's land tax; settlement on/after 1 January means the new owner is liable.
Yes. Engage a quantity surveyor (e.g. BMT, Washington Brown) to prepare a depreciation schedule (~$650). Plant and equipment items can be depreciated only if you bought them new (post-2017 rules limit second-hand items).
Investors pay the same standard NSW transfer duty as owner-occupiers, but DO NOT receive the first home buyer exemption ($800K full / $1m concession). Investors cannot use the off-the-plan 12-month duty deferral either (occupier-only).
Tenancy assignment (existing tenants stay), rent collection from settlement, depreciable items list, vendor's existing depreciation schedule (transfer to buyer), warranty on appliances and fixtures, and right to inspect prior to settlement.
Related NSW Guides & Tools
Need NSW conveyancing help?
Speak directly to a senior NSW conveyancer about your purchase, sale, or transfer. Fixed fees, no per-call charges.