Land Tax

Navigating the intricacies of Land Tax can often feel challenging for property owners.  As jurisdictions impose varying regulations and rates, understanding your obligations can be a daunting task. With concerns mounting over escalating land tax liabilities, it is essential to grasp the fundamentals of this fiscal responsibility.

Do you need to pay Land Tax in Victoria?

All land is taxable unless an exemption applies (for example, your private residence that you live in as your PPR). There is no requirement that land must have improvements on it before it is taxable. If you have a vacant block of land with a value above the $50,000 tax free threshold, you are required to pay land tax.

You may have to pay land tax if you own, either individually or jointly with others:

• investment properties, including residential rental properties,
• commercial properties such as retail shops, office premises and factories,
• holiday homes, and
• vacant land.

How is land tax calculated?

Land tax is calculated using the site values of all taxable land you owned as at midnight on 31 December of the year preceding the year of assessment. 

What is the vacant land tax in Victoria 2025?

Currently, the Vacant Residential Land Tax only applies to inner-city and middle ring suburbs of Melbourne. The rate of Vacant Residential Land Tax will also expand from 1 January 2025 to apply a sliding scale depending on how long the property is vacant: 1% for the first year; 2% for the second year.

How often do you pay land tax in Victoria?

Land Tax is an annual tax based on the total taxable value of all the land you own in Victoria, excluding your principal place of residence.

Is land tax tax deductible?

Land tax is paid annually when you own a property that is not your main residence  that’s above the land tax threshold. You can claim land tax on your investment property as a tax deduction each financial year.

Do super funds pay land tax in Victoria?

As the superannuation fund is an excluded trust, the trust surcharge rates do not apply. Instead, the trustee of the superannuation fund will be assessed on the unit trust land together with any other land held on behalf of the superannuation fund at the general rates, subject to the deduction.

Why has land tax gone up so much in Victoria?

As part of its “COVID Debt Repayment Plan”, the Victorian Government announced a range of land tax increases which will apply for a 10-year period starting from 1 January 2024. The changes do not impact land already exempt from land tax such as family homes and primary production land.

Properties held within a trust

Special rules apply to land held on trust.

If you are a trustee holding land on trust, you must tell the SRO.

They will assess each trust that a trustee acts for separately and send them a separate assessment. If you are the trustee of multiple trusts, you will receive a separate assessment for each trust.

Land tax trust surcharge

Land held on trust for a fixed, discretionary or unit trust is generally assessed at trust surcharge rates of land tax.

Trust surcharge rates are higher than general land tax rates and apply once the total value of the taxable land held by the trust is $25,000 or more. When the total value of the taxable land is $3,000,000 or more, there is no difference between the general and trust surcharge land tax rates.

Contact our team to understand your tax liabilities.

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