Marriage or relationship breakdown and land tax

Key information

A marriage or domestic relationship breakdown may change your land tax assessment.  

Land tax is based on who owns the land at 31 December before the assessment year. Any changes associated to property ownership or usage will be reflected in future land tax assessments rather than the current assessment year. This may happen if: 

• ownership of the property changes  
• the property is no longer used as a principal place of residence. 

The examples on this page apply to property owned directly by individuals (natural persons). Different land tax rules may apply if property is owned by a company, trust or other ownership structure. 

Principal place of residence with both parties on title 

Ownership unchanged and one party remains in the former family home 

A person’s principal place of residence is exempt from land tax. 

If both parties remain on the title after a separation or divorce, land tax depends on whether the property continues to qualify for a principal place of residence exemption.  

If one party remains living in the property as their home, they will continue to receive a principal place of residence exemption for their interest in the property. 

The party that moves out may still be eligible for a principal place of residence exemption on their share of the property for up to 2 tax years. This is provided they do not claim a principal place of residence exemption on another property. 

Read more about changes to your principal place of residence exemption. 

Ownership unchanged and the property becomes an investment 

If neither party continues to use the property as their principal place of residence, land tax will apply. 

One party takes full ownership and remains in the home 

If the party who becomes the sole owner continues to live in the property as their home, it will be exempt from land tax. 

One party takes full ownership and the property becomes an investment 

If one party becomes the sole owner and the property is no longer used as their principal place of residence, land tax will apply. 

The property is sold 

If the property is settled on or before 31 December in the year prior to the assessment year, land tax will not apply to either party in future years. 

Non-principal place of residence with both parties on title 

These examples cover investment properties, holiday homes and other properties where land tax applies. 

Ownership unchanged and the property remains at investment 

If both parties remain on the title, the property will continue to be assessed as a joint ownership. 

Ownership unchanged and the property becomes one party’s principal place of residence 

If both parties remain on the title and one party moves into the property as their principal place of residence: 

• the party who moves in will generally receive a principal place of residence exemption for their share of the property and therefore will generally not pay land tax on their share of the property 
• the other party will continue to pay land tax on their share of the property. 

One party takes full ownership 

A property settlement may involve one party transferring their interest in the property to the other. 

Because land tax is based on who owns the land at 31 December before the assessment year, a change in ownership will generally affect future land tax assessments rather than the current assessment year. 

• If the new owner uses the property as their principal place of residence, they may be eligible for a land tax exemption. 
• If the property remains an investment property or holiday home, land tax will continue to apply. 

The property is sold 

If the property is settled and neither party owns it at 31 December before the assessment year, land tax will not apply to either party in future years.