Investors have been readily turning their attention to the Western Australia property market, thanks to its booming population, strong rental demand and low vacancy rates.
Also boosting confidence in this market is a steady economy, supported by the resources sector and infrastructure spending. This includes the Metronet passenger rail line - the largest public transport project ever undertaken in Perth, made up of 23 new stations across 72 km, which is reshaping the capital city.
Western Australia offers relatively affordable entry costs, drawing interest from both local and interstate investors. Also catching the eye of investors are regional areas such as Geraldton, Bunbury and Busselton also offer a variety of price points, solid demand and lifestyle.
While it is easy to be swept up in the excitement of buying rental property and finding a tenant, it is important to stay across your financial obligations beyond maintenance and repairs. Land tax is an annual state-imposed charge on the value of land, excluding any structures.
This guide explains who pays land tax, who’s exempt, how it’s calculated, when to pay and importantly, how to effectively plan.
Who pays land tax in WA?
Let’s look at how land tax in Western Australia is calculated before exemptions are applied. Remember that, unlike stamp duty, this is an annual charge that must be paid each year.
The taxable amount is based on the total unimproved value of all land you own in Western Australia as of midnight on 30 June each year. If multiple properties are owned, they are aggregated together to calculate the land tax bill. The latest rates are available online through the WA Department of Treasury and Finance.
If the taxable land is in Perth’s metropolitan region, it may also attract the Metropolitan Region Improvement Tax (MRIT). These funds are used by the Planning Commission for roads, open spaces and parks.
Remember, if the site value of the land is below the relevant threshold, then no land tax needs to be paid.
Who is exempt from paying land tax in WA?
The good news is that not all land is subject to this tax, with several exemptions. It is not payable on:
- Principal place of residence
- Residences under construction
- Moving from one residence to another
An owner-occupier moving into aged care is also exempt from land tax or if the property is part of a deceased estate. Land used for primary production is also exempt from land tax.
There are also several exemptions, concessions and rebates available that may be applicable. You can check your eligibility online with the WA Department of Treasury and Finance. You must apply for any exemptions, and they are subject to further conditions.
How is land tax calculated in WA?
Land tax is calculated on the unimproved value of your land, without any buildings, each year.
According to the WA Department of Treasury and Finance, the taxable value for land is the lesser of the current unimproved value of the land or 150 per cent of the previous year’s unimproved value.
2025 – 2026 Land Tax Thresholds
- General threshold $300,000
If the land is held jointly with someone else, each lot is assessed separately. If you hold land as a trustee, then you will be liable for land tax as if the land were your own.
You can work out your land tax using the WA Department of Treasury and Finance calculator here.
When do you pay lax tax in WA?
Land tax is collected by the Office of State Revenue, which is part of the WA Department of Finance. You should receive a Notice of Assessment between September and January. Funds raised go towards the cost of running the Government, including health, education, law and order.
Payment is due within 49 days after the issue of your land tax assessment notice.
The amount can be paid in full by the due date shown on the notice, or you may be able to opt for an instalment plan. You can also use BPay, a credit card or a cheque.
It is important to check your assessment carefully – if properties you no longer own are listed or new ones are missing, contact the WA Department of Treasury and Finance immediately.
It is recommended to discuss your assessment with someone from the department before submitting a formal objection. The latter needs to be lodged within 60 days on which the notice was served or the date on which the taxpayer was notified of the decision.
If you underpay or forget about your land tax assessment, then you could incur interest or penalty tax.
LJ Hooker is here to help
When you are ready to start or add to your property portfolio in Western Australia, be sure to contact your nearest LJ Hooker agent. They are specialists who are experienced in helping people looking to get started in investing and can access property databases and valuation tools.
Importantly, they understand the Western Australian investment market and can also arrange for an experienced property manager to take care of the property. This reduces the burden on you as a landlord and will allow you to focus on growing your portfolio. Don’t forget to be a tax-smart investor by getting all your documentation in order from the start. This includes knowing what expenses can be claimed, your tax obligations and declaring all rental-related income in your annual return.
DISCLAIMER - The information provided is for guidance and informational purposes only and does not replace independent business, legal and financial advice which we strongly recommend. Whilst the information is considered true and correct at the date of publication, changes in circumstances after the time of publication may impact the accuracy of the information provided. LJ Hooker will not accept responsibility or liability for any reliance on the blog information, including but not limited to, the accuracy, currency or completeness of any information or links.
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