As someone looking to build their property portfolio in Victoria, it is important to understand Land Tax treatments and what it means to you.
What is Land Tax?
Land tax is the annual tax you pay to the State Revenue Office for all the land you own in Victoria that is not your principal place of residence.
If you own land with the total value of or exceeding $300,000, you must pay land tax. The land tax threshold for general land tax rates is changing as of 1 January, 2024. Note that your principal residence is not included in the total value of the land you own.
Some examples of taxable land include investment properties, retail premises, and commercial properties.
How is Land Tax calculated currently?
Land tax is calculated by applying the appropriate land tax rate to the total value of all taxable land you own at midnight on 31 December. The current general land tax rates* are:
|Total taxable value of land||Land Tax payable|
|$300,000 to <$600,000||$375 plus 0.2% of amount > $300,000|
|$600,000 to <$1,000,000||$975 plus 0.5% of amount > $600,000|
|$1,000,000 to <$1,800,000||$2,975 plus 0.8% of amount > $1,000,000|
|$1,800,000 to <$3,000,000||$9,375 plus 1.55% of amount > $1,800,000|
|$3,000,000 and over||$27,975 plus 2.55% of amount > $3,000,000|
*The above table is applicable to properties held by a person in their own right
Properties held on trust are assessed differently from those held by an individual. The trust rates are higher such that land tax applies when the total taxable land held by the trust is $25,000 or more. More information on excluded trusts can be found on the State Revenue Office of Victoria.
Additionally, a surcharge on land tax applies to absentee owners from 2020 onwards. This is an additional amount payable over the general land tax, and trusts land tax rates. Again, this surcharge, like the general rate land tax, does not apply to land exempted from land tax assessment.
When is land tax issued?
If you are liable to pay land tax, your land tax assessment is generally sent to you or your authorised representative between January to March of each calendar year. It is important that you review the information on your land tax assessment to ensure the information is accurate, including that it does not include any properties that you have disposed of before or on 31 December or any properties that should be exempted from land tax assessment.