Land tax on land in the state of Victoria.
Midnight 31 December
Corporate entities and trusts
Related corporations are grouped, their landholdings aggregated and treated as a single entity for a land tax calculation. A company is considered to be a related based tests for common ownership and control.
Discretionary trusts pay a surcharge land tax rate, unless the land was acquired on or before 31 December 2005 and a beneficiary nominated. In general, fixed and unit trusts may avoid the surcharge land tax rate if the Commissioner is advised of beneficial interests or unit holdings.
Exemptions and concessions
Exclusions from land tax can be on the basis of its use, or status of the owner. Exemptions include:
- Principal place of residence, including a trust beneficiary with a vested interest who must also meet the occupancy requirements. From the 2020 land tax year, land in metropolitan Melbourne that is contiguous with a principal place of residence but on a separate title and without a separate residence will no longer be exempt from land tax.
- Land used for primary production, with varying requirements depending on its zoning location.
- Land occupied by rooming houses and charities, religious bodies, educational bodies and municipalities
- See a list of exempt-status owners here.
Land tax rates
Vacant Residential Property Tax starts 1 January 2018
From the 2017 Victorian State Budget announced 2 May 2017, a new Vacant Residential Property Tax of 1% of a property’s capital improved value on properties left unoccupied for six months or more is to commence January 1, 2018.
Property owners in Victoria are required to notify the State Revenue Office online by 15 January 2019 if their property in the nominated 16 Melbourne council area was unoccupied for more than six months in 2018.
This a new tax, separate from land tax, the absentee owner surcharge and the proposed federal foreign owners annual charge.
- Residential Property Law In Victoria: 2017 Year In Review And What To Expect In 2018
- Vacant Residential Land Tax
- Vacant Residential Land Tax – Do you need to notify the State Revenue Office?
- Knock, knock…anybody home? If not, you’ll be taxed
Thresholds apply to the aggregated value of all land owned by an owner.
The land value for assessment purposes is ‘site value’ which determined by the local council or the Valuer-General every two years. The site value is displayed on council rates notices.
From 1 January 2017, a 1.5 per cent absentee owner surcharge (previously 0.5 per cent) on land tax applies to Victorian land owned by an absentee owner, which includes trustees of absentee trusts.
From 1 January 2016, a 0.5 per cent absentee owner surcharge on land tax will apply to Victorian land owned by an absentee owner. Owners are required to provide notice via an online portal by 15 January 2016.
Absentee owners surcharge
The absentee landowner surcharge will be increased from 1.5% to 2% from the 2020 land tax year, in line with the rate in New South Wales. (Budget 2019)
An absentee individual is
- not an Australian citizen or permanent resident,
- does not ordinarily reside in Australia, and
- as absent from Australia on 31 December of the year prior to the tax year, or
for more than six months in total in the calendar year prior to the tax year
An absentee corporation is incorporated outside Australia, or in which an absentee person has a controlling interest.
An absentee trust has at least one absentee person with a beneficial interest.
See more (including guidelines for exemption) on absentee owners here.
Special land tax
Special land tax is a one-off tax charged in certain circumstances where land that has been exempt from land tax is no longer exempt from land tax.
The special land tax rate is 5%, or 5.5% ( 6.5 per cent from 1 January 2017) for owners paying the absentee owner surcharge. See more here: Special land tax
A land tax assessment objection must be lodged 60 days of the date of issue of the assessment notice, extendable with Commissioner’s approval. See Objections and reviews
To dispute a valuation (required within 2 months of receipt) – see here.
More detailed information
Land tax – State Revenue Office of Victoria
This page was last modified 2019-05-28