Navigating Property Tax in Sydney: A Guide for Investors and Homeowners

Property ownership in Sydney is both a valuable investment and a complex tax responsibility. Whether you’re a first-time homeowner, a seasoned investor, or planning to purchase a commercial space, understanding property-related taxes is crucial. From stamp duty and land tax to capital gains and negative gearing implications, Sydney accountants play an essential role in ensuring property owners stay compliant while optimising their financial outcomes.

In this blog, we unpack the key property taxes in New South Wales (NSW), explore common investor strategies, and show how working with an experienced accountant can help navigate the ever-evolving tax landscape.

Stamp Duty: Your First Tax Hurdle

When purchasing property in NSW, buyers must pay stamp duty, a state government tax calculated on the purchase price. Key facts:

Calculated on a sliding scale based on property value
Concessions may apply for first-home buyers
Payable within 3 months of contract exchange
Foreign buyers may incur additional surcharges

Accountants help clients plan ahead for stamp duty liabilities and determine eligibility for exemptions or concessions.

Land Tax in NSW

Land tax is an annual tax levied on the value of land you own above a certain threshold (excluding your principal place of residence). For the 2025 land tax year:

Threshold: $1,075,000 (approx.)
Rate: $100 plus 1.6% of land value above threshold, up to a premium rate of 2%
Applies to investment properties, vacant land, and commercial real estate

Sydney accountants ensure clients:

Know if they’re liable based on property type and land value
Structure ownership (e.g., trusts or companies) for tax effectiveness
Claim any exemptions (e.g., primary residence or land used for primary production)

Capital Gains Tax (CGT) and Property

CGT applies when you sell a property (except your main residence under certain conditions). Important considerations:

50% CGT discount may apply if the asset is held for more than 12 months
Selling a property that was once your main residence and later rented may attract partial CGT
Accountants calculate the cost base accurately (including purchase costs, legal fees, renovations)

Proper planning around CGT can mean substantial savings. Accountants can help decide the best time to sell or how to offset gains with losses.

Negative Gearing and Tax Deductions

Investors who borrow to purchase property can often claim a net rental loss as a tax deduction. Key deductions include:

Mortgage interest
Property management fees
Repairs and maintenance
Council rates and strata levies
Depreciation of fittings and construction costs

While negative gearing can reduce taxable income, it’s important to ensure expenses are legitimate and well-documented. Accountants also help forecast how future changes in interest rates or rental income may affect long-term profitability.

Property Ownership Structures

Choosing the right ownership structure has major tax implications. Sydney accountants can advise whether to hold a property:

Individually: Simple, but subject to personal tax rates and CGT
In a Trust: Offers asset protection and flexibility in distributing income
Through a Company: Suitable for commercial property; can offer tax rate benefits
Via SMSF (Self-Managed Super Fund): Allows tax-effective long-term wealth creation, but comes with strict compliance rules

Property Tax Tips for Sydney Owners

Keep all property-related receipts and documents organised

Engage a quantity surveyor for a depreciation schedule

Review rental income and expense records regularly

Plan ahead for land tax and CGT obligations

Schedule an annual review with your accountant to assess performance and compliance

Why Choose Berzy Chartered Accountants for Superannuation Support?

Owning property in Sydney is a rewarding long-term strategy—but only if managed with financial foresight. By partnering with a knowledgeable local accountant, property owners can ensure they meet tax obligations, unlock available deductions, and position their portfolio for sustainable growth.

Contact Berzy Chartered Accountants today to learn how we can help your seasonal business thrive.

Berzy Chartered Accountants & Mortgage Brokers are an accounting firm committed to delivering comprehensive financial solutions that empower individuals and businesses to achieve stability and confidence in their financial future