NSW Valuer General — How Land Values Are Set and Why They Matter

What is land value vs market value?

Land value (as determined by the NSW Valuer General) is the value of the land only, excluding any improvements — buildings, fences, driveways, landscaping, and other structures. It represents the hypothetical price the land would achieve on the open market if it were unimproved and available for its highest and best use under current planning controls.

Market value, by contrast, includes the value of improvements on the land. For most residential properties, the market value (what you would actually pay to buy the house) is significantly higher than the Valuer General's land value because it includes the dwelling.

The gap between land value and market value varies significantly by property type. For a standard house-and-land, land value might be 40–60% of market value in middle-ring suburbs. For a rundown house on a prime development site, the land value (reflecting its highest-and-best-use potential) might be close to market value.

How land values are used

Land values determined by the Valuer General are used in several ways:

Council rates: most NSW councils calculate rates as a percentage of the land value. A higher land value assessment means higher annual council rates.

Land tax: the NSW State Revenue Office uses land value to calculate land tax for investors and property developers. Owner-occupiers are exempt from land tax on their principal place of residence. The tax-free threshold in 2025-26 is $1,075,000 of total land value across all holdings (excluding the principal residence). Land value above this threshold is taxed at 1.6% per year, rising to 2% for values above $6,621,000.

Emergency services levy: calculated partly from land value.

Planning purposes: land value assessments inform council decisions about infrastructure contributions and planning proposals, though they are advisory rather than determinative.

How the Valuer General assesses land

The Valuer General uses a process called mass appraisal — statistical models calibrated to recent sales data — to assess the land values of all parcels simultaneously, rather than individually valuing each one. The assessments are updated annually (dated 1 July each year) and reflect market conditions at that date.

The methodology uses sales of comparable parcels (vacant land sales, and sales of properties where the value is predominantly land) to establish land value benchmarks for each locality. The assessor then applies adjustments for lot size, frontage, depth, shape, access, and planning controls.

Owners can object to their land value assessment within 60 days of receiving the valuation notice. Objections are resolved by the Valuer General's office, and if unsuccessful can be appealed to the Land and Environment Court.

Land value and investment property decisions

For investors and developers, the Valuer General's land value is a key input into feasibility analysis. A high land value relative to market value (i.e., a small improvement premium) signals a site where the development potential is already largely priced in — there may be limited additional upside from further development.

For residential buyers, land tax is directly relevant if you own investment properties beyond your principal residence. Understanding the land value trajectory — whether it is rising faster or slower than adjacent suburbs — gives a signal about the relative attractiveness of a suburb as a long-term hold.

Land values are publicly available via the NSW Valuer General's website, searchable by address. They are updated annually and are a free, authoritative data source for property analysis.

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