News

State Revenue Office increasing review of Land Tax compliance

The State Revenue Office of Victoria are actively increasing its monitoring of property ownership assisted by its data matching of Land Titles to ASIC, ATO and other federal and state Government regulators.  If you own more than one property, whether it be as an individual, with your spouse, through a company or investment trust, Land Tax is applicable.  You are exempt from paying the Land Tax on your Primary Principal Residence (PPR) and land used for Primary Production (eg a farm). 

Land Tax is calculated on the "taxable value" or your property.  This value is the same value used for your Council Rates.  You can object to the valuation made by Council if you have evidence that it is unreasonably high.

2009-2013 General Land Tax Rates

Total taxable value of landholdings

Land tax payable

 < $250,000

Nil

$250,000 to < $600,000

$275 plus 0.2% of amount > $250,000

$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 1.3% of amount > $1,800,000

$3,000,000 and over

$24,975 plus 2.25% of amount > $3,000,000

 2009-2013 Surcharge Rates for Land Tax Trusts

Total taxable value of landholdings

Land tax payable

 < $25,000

Nil

$25,000 to < $250,000

$82 plus 0.375% of amount > $25,000

$250,000 to < $600,000

$926 plus 0.575% of amount > $250,000

$600,000 to < $1,000,000

$2,938 plus 0.875% of amount > $600,000

$1,000,000 to < $1,800,000

$6,438 plus 1.175% of amount > $1,000,000

$1,800,000 to < $3,000,000

$15,838 plus 0.7614%* of amount > $1,800,000

$3,000,000 and over

$24,975 plus 2.25% of amount >$3,000,000

If you temporarily vacate your PPR, for example to take a job away from home, and you rent out your PPR to a third party for more than 6 months total in a calendar year (not necessarily consecutive months), you lose your PPR exemption and must pay Land Tax.

If you have a PPR and a holiday house which you rent to no one and is only used by family members or friends, you are required to pay Land Tax on that holiday house.

If you have a PPR and own a block of vacant land elsewhere, you are required to pay Land Tax on that vacant land.

Generally, if you hold property in a Trust, a surcharge of Land Tax will be applied so that you pay a higher rate.  However in some circumstances, you can nominate a beneficiary of that Trust to be taxed the Land Tax directly at the general rate instead of incurring the surcharge rate.

You can read more about this topic by clicking here  or speak with our specialist advisors about your unique situation.