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Land tax - frequently asked questions

You may need to pay land tax if you own an investment property, holiday home, commercial property or vacant land.

General information

    Land tax assessments

    Payments

    Objections

    Prohibition on apportionment

       

      General information

      What is land tax?

      Land tax is an annual tax based on the total taxable value of all the land you own in Victoria, excluding exempt land such as your home (principal place of residence), as at midnight on 31 December in the year preceding the assessment year.

      When the total taxable value of this land is equal to or above the $50,000 threshold ($25,000 for trusts) you must pay land tax.

      Land tax and vacant residential land tax are different. You may receive an assessment for both.

      How is land tax calculated?

      Land tax is calculated by applying the appropriate land tax rate to the total taxable value of your land holdings. 

      Your taxable value is the total site value of all of the lands you own. However,  your total taxable value does not include exempt land such as your home. Site valuations are prepared as part of the general valuation process by the Valuer-General of Victoria. These valuations are also used by local councils to calculate rates. Find out more information about site valuations.

      Your tax may have increased due to an increase in the valuation of a property or as a result of the COVID Debt Repayment Plan. We do not have discretion to change the land tax rates that apply to your landholdings.

      Find out more about the current and historical land tax rates. 

      Land tax calculator

      Land tax trust calculator

      What if I own land with others?

      If you own land with others, in whatever ownership structure, you are a joint owner of land. Each unique combination of owners is considered a different joint ownership. Joint owners are assessed for land tax in a different way. Find out more about joint ownership.

      What happens with land held on trusts?

      Land held on trust is treated differently from land held by a person in their own right.

      If you own land as trustee of a trust, you have to pay land tax if the aggregate of the taxable Victorian land holdings of the trust is valued at $25,000 or more.

      Also, a surcharge rate on the general land tax applies for the aggregate Victorian land holdings of the trust from $25,000 through to less than $3 million. The surcharge does not apply for taxable land holdings valued at $3 million or more.

      The trust surcharge rule is subject to various exclusions and exceptions. It does not apply to certain trusts, such as an administration trust. Trustees may also avoid the surcharge rate by notifying us of the beneficial interests in land or unit holders of the trust.

      See more land tax trusts frequently asked questions

      I own land with my partner. Will we pay land tax?

      If you own land with your partner, you are considered joint owners. We assess joint owners for land tax together, as if they were one person, and we also assess each owner individually. Whether you pay land tax as joint owners, individually, or both, depends on the land you own together and individually, the value of that land and how the land is used.

      Why has my land tax increased this year?

      If your assessment has increased, it is because the total taxable value of your land is equal to or exceeds the $50,000 threshold ($25,000 for trusts). The reasons for this could be:

      • Temporary changes to the tax-free threshold for land tax which commenced in 2024.
      • You have purchased non-exempt land in the past calendar year, such as an investment property or holiday home.
      • An exemption has been removed. For example, you may have started renting out what used to be your principal place of residence.
      • The value of your non-exempt land has increased to be equal to or above the threshold.

      Learn more about the COVID Debt Repayment Plan

      Can I get an exemption from land tax for my holiday home?

      No. Holiday homes, regardless of whether they generate income, are not entitled to an exemption from land tax.  

      Residential properties in inner and middle Melbourne that are not used and occupied for at least 6 months are generally subject to vacant residential land tax. However, an exemption from vacant residential land tax is available where the property is used by the owner or vested beneficiary as their genuine holiday home for a period of at least 4 weeks in the previous calendar year.

      Find out more about vacant residential land tax

      I am currently building a home, do I need to pay land tax?

      Yes. You may be eligible for an exemption from land tax if you are constructing or undertaking renovations on a property you intend to occupy as your home. You will need to make an application to receive this exemption as it is not automatically applied. You can apply for this exemption through My Land Tax. Learn more about exemptions for construction or renovation of a principal place of residence (PPR).

      I live in a motorhome or shed on this land, why am I paying land tax?

      To be eligible for a principal place of residence (PPR) exemption, there must be a building affixed to the land which is designed and constructed primarily for residential purposes and can be lawfully used as a place of residence. Caravans, motorhomes and sheds do not meet these requirements.

      I own a vacant block of land, why am I paying land tax? 

      All land is taxable unless an exemption applies. There is no requirement that land must have improvements on it before it is taxable. This means that if you have vacant block of land with a value above the $50,000 tax free threshold, you are required to pay land tax.

      However, if you are about to commence construction of your new principal place of residence (PPR), you may be eligible for an exemption. Find out more about an exemption for construction or renovation of a PPR.

      I sold my property in this calendar year, can I get a refund on part of my land tax? 

      No. Land tax is not apportioned based on how many days in a year you own the property. Land tax is assessed on all the land you own at midnight on 31 December in the preceding year to the assessment year. For example, if you sold your investment property and settlement with the new owner occurs on 1 March 2023, you will be liable for land tax for the 2023 land tax year as you owned the property as at midnight 31 December 2022.

      Can I claim an exemption?

      There are a number of exemptions available for land tax. Your home, also called your principal place of residence (PPR), is exempt from land tax, as is primary production land and land used for charitable purposes. Exempt land does not include investment properties or holiday homes you own, even if they are vacant. If you move overseas to live or work for an extended period, this may also affect your principal place of residence exemption status.

      In order to receive an exemption from land tax, you need to make an application. Find out more about exemptions and how to apply.

      I have a covenant with Trust for Nature, can I claim an exemption?

      Yes. From the 2024 land tax year, land is exempt if it is protected by a conservation covenant, being a voluntary, legal agreement made between a private landowner and Trust for Nature to permanently conserve land. The exemption applies to the area of land which is protected by the covenant.

      Once you receive your 2024 land tax assessment you can apply for the conservation covenant exemption. Land tax assessments are issued between mid-January and late June each year.  To apply you will need to provide us: 

      • your customer number 
      • property address which relates to the covenant
      • details of what the land is used for eg your home, primary production land. If it is used for more than one activity, please tell us about them all. 
      • a copy of the conservation covenant entered into with Trust for Nature (if you have a copy)
      • date of commencement of the covenant

      Applications can be received online through My Land Tax (from April 2024 onwards), by contacting us online or you can write to us at: 

      State Revenue Office
      GPO Box 1641
      Melbourne, VIC, 3001 

      What is the absentee owner surcharge? 

      The absentee owner surcharge is an additional amount payable over the general and trust surcharge rates of land tax. From the 2024 land tax year a 4% absentee owner surcharge (previously 2% from 2020-2023 land tax year, 1.5% from 2017-2019 land tax year and 0.5% for the 2016 land tax year) on land tax applies to Victorian land owned by an absentee owner.

      You must tell us if you are an absentee owner, otherwise penalties may apply.

      What is the difference between land tax and vacant residential land tax?

      Land tax is an annual tax based on the total taxable value of all the land you own in Victoria, excluding exempt land such as your home (principal place of residence), as at midnight on 31 December in the year preceding the assessment year. Land tax applies to all properties (including houses, units and apartments), commercial properties (such as offices, retail and factories), holiday homes and unimproved or vacant land. There are a number of exemptions which can apply to exempt a property from land tax.

      Find out more about land tax

      Vacant residential land tax only applies to residential properties in inner and middle Melbourne that were vacant for 6 months or more in the previous calendar year. From 1 January 2025, vacant residential land tax will be expanded to apply to all vacant residential properties in Victoria. Properties which are exempt from land tax are not liable for vacant residential land tax. However, a property which is exempt from vacant residential land tax may be liable for land tax. 

      Find out more about vacant residential land tax

      What is grouping?

      Corporations are related in certain circumstances. Where 2 or more corporations are related, the Commissioner may treat them as a group for land tax purposes.

      The taxable value of all Victorian lands owned by a group is aggregated to calculate the land tax payable on those lands. Members of a group are jointly and severally liable for the land tax payable by the group.

      Land held by a trustee of a trust is not grouped for land tax purposes, but you are required to notify us that the land is held on trust.

      What is special land tax?

      Special land tax is a one-off tax charged in certain circumstances where land that was exempt loses its exempt status. It is charged at a rate of 5 cents for each dollar of the taxable value of the land at the date that the land ceased to be exempt.

      If you are an absentee owner, you will be charged a rate of 7% if the land ceases to be exempt for the 2020 land tax year.

      Notices of assessment for special land tax are issued on a case by case basis, and can be issued at any time.

      From 16 December 2020, special land tax no longer applies. This means that if land was previously exempt from land tax under any of the categories of exemption ceases to be exempt on or after 16 December 2020, the owner will not be liable for the one-off tax payment.

      Land tax assessments

      What is the assessment period?

      Land tax is assessed on a calendar year basis on the land you own at midnight on 31 December before your assessment is issued. For example, the land you own at midnight on 31 December 2023 is used to calculate land tax in 2024.

      When are assessments issued?

      Land tax assessments are generally issued between January and June each year.

      We are committed to ensuring all taxpayers pay the correct amount of land tax, so you may receive an assessment (including assessments for previous land tax years) at other times of the year.

      For example, if we discover a principal place of residence exemption has been incorrectly applied to your land, we may issue reassessments to recover the land tax you should have paid for the years you incorrectly received the exemption. You may also be charged penalty tax.

      What should I do if my assessment is incorrect?

      Most common changes and updates can be made easily online via My Land Tax.

      Common changes and updates include:

      • updating your contact details
      • updating your assessment delivery preference
      • updating your principal place of residence
      • removing land that you do not own as at 31 December
      • applying for an exemption for a property that should have been marked as your principal place of residence or as primary production land.

      If you need to remove an exemption from a land that you are no longer entitled to, call us on 13 21 61. Please have your assessment on hand along with any other information relevant to your request. 

      What happens if I don't notify you that my assessment is incorrect?

      You must notify us of any errors or omissions in your assessment within 60 days of the issue date of your assessment. Penalties may apply if you do not notify us within this time. You must notify us if you:

      • own additional land which has not been included in your assessment
      • receive more than 1 individual annual assessment for lands you own by yourself
      • are receiving a principal place of residence exemption for land that is not, or is no longer, your principal place of residence (your home)
      • have received any other exemption for which you are not eligible
      • the land is held on trust
      • you are an absentee owner and your assessment has not included the absentee owner surcharge.

      There is a property listed on my assessment that I don't own. What should I do?

      Most common changes and updates to an assessment, including removing land that you do not own as at 31 December, can be made easily online via My Land Tax. If you still need assistance, call us on 13 21 61.  

      I have received the FHOG/FHB duty concession from the SRO. Why have I received a land tax assessment?

      Your representative may not have informed us through a notice of acquisition (NOA) that this property was intended to be your principal place of residence (PPR) for land tax. There are different requirements that need to be met to obtain the FHOG/FHB duty concessions and the land tax PPR exemption. You can easily change this in our online portal My Land Tax by selecting ‘Manage Properties’ and selecting ‘I live here’ from the drop-down list on the relevant property and following the prompts.

      You sent this assessment to my home address but still taxed me on this property. Why?

      We may not be aware that you are occupying this property as your home or your representative may not have informed us through a notice of acquisition (NOA) that this property was intended to be your principal place of residence (PPR). You can easily change this in our online portal My Land Tax by selecting ‘Manage Properties’ and selecting ‘I live here’ from the drop-down list on the relevant property and following the prompts.

      What are the different types of assessments?

      Individual assessments – if you own taxable land alone (not with any other joint owner), you will receive an individual assessment. This assessment displays all of the land you own alone, together with any interest in land you own jointly with others, and where a nomination or notification has been received, any interest you have in land held on trust.  If a company owns land in its own right (not on trust), that company will receive an individual land tax assessment.

      Joint assessments – if you own land jointly with others you may also receive a separate joint assessment. Each unique combination of owners is considered a different joint ownership, so you may receive more than one joint assessment if you are a member of a number of unique joint ownerships. The customer receiving the joint assessment is receiving it on behalf of the other joint owners. Find out more about joint ownerships.

      Trust assessments – individuals or companies who hold taxable land as the trustee of a trust will receive an assessment which states that the assessment is issued to them as trustee for their trust. The trustee will receive an assessment for each different trust which holds taxable land. Find out more about land tax and trusts.

      Land tax group assessments – for corporations which are grouped, the land holdings of each corporation in the group are combined and assessed as if they were a single land holding owned by a single corporation (i.e. land tax is calculated on the total taxable value of all land owned by members of a group as if it were a single piece of land held by a single company). Members of a land tax group are jointly and individually liable for the land tax payable by the group. Find out more about land tax and grouping.

      Vacant residential land tax assessments – vacant residential land tax is separately assessed for certain residential properties which are vacant for more than 6 months in a calendar year and are not eligible for an exemption.  Find out more about vacant residential land tax.

      Why do I have 2 assessments for the same property?

      A land that is jointly owned may be assessed under both an individual assessment and a joint assessment. The individual assessment will include a deduction reflecting the individual's share of the tax under the joint assessment to avoid double taxation.

      A land that is held on trust may be assessed under both an individual assessment and a trust assessment. This will occur if the individual is a beneficiary of the trust. The individual assessment will include a deduction reflecting the individual's share of the tax under the trust assessment to avoid double taxation.

      Remember, you may receive more than one assessment but you should receive only one individual assessment for land you own alone. If you receive more than one individual assessment, you must call us on 13 21 61 so that we can correctly record the land(s) you own.

      What is single holding tax?

      The single holding tax displayed on your assessment is for information purposes only. It is the amount of tax you would pay on one property at ordinary land tax rates if it was the only property you owned.

      For example, if you own 3 taxable properties, then 3 separate single holding tax amounts will be shown on your assessment.

      Single holding tax is shown against each taxable property on the Statement of Lands page of your assessment. Your principal place of residence and any other exempt land is not included in this calculation.

      What is proportional tax?

      Proportional tax is the tax applicable to a particular land as a proportion of the total land tax liability of your assessment.

      For example, if you own 4 taxable properties, 4 separate proportional tax amounts will be shown on your assessment. Proportional tax is shown against each taxable property on the Statement of Lands page of your assessment. Your principal place of residence and any other exempt land is not included in this calculation.

      If your assessment is amended or a valuation for a land is updated following a valuation objection, this will impact the proportional tax amount shown against each property.

      What do the codes on my land tax assessment mean?

      A full list of codes used on land tax assessments and their meanings can be found on our website.

      Payments

      When do I have to pay my land tax?

      Your assessment will outline when you have to pay your land tax.

      If your land tax is due for payment in full or by instalment while you are awaiting a decision on your matter – whether a request for a change, objection or valuation objection – you should pay that amount as per your assessment. If you do not pay your assessment by the due date, interest may accrue daily on any outstanding amount. AutoPay instalments must be set up annually as instalment amounts can change depending on your tax liability. 

      How can I pay my land tax?

      There are 3 ways to pay your land tax assessment – via credit or debit card, BPAY, or in instalments via AutoPay.

      If you choose AutoPay, you can pay your land tax assessment in fortnightly, monthly or in four equal payments over a maximum 38-week period from the issue date on your assessment.

      Find out more about your payment options

      How do I set up an AutoPay schedule?

      You can create an AutoPay arrangement via My Land Tax. It is important to pay or set up a payment arrangement on time to avoid late payment interest and recovery actions. AutoPay instalments must be set up annually as instalment amounts can change depending on your tax liability.

      What is the deadline to set up instalments via AutoPay?

      You can set up an AutoPay instalment any time before the assessment due date. However, the maximum period for the instalment plan is 38 weeks from the issue date of the assessment. To spread instalment payments over the full 38 weeks, you need to set your instalments up when you receive your assessment. 

      How do I change my payment details for an existing AutoPay instalment?

      To update your payment details, log in to AutoPay and click the ‘View/update’ button next to the relevant payment schedule.

      You can update your direct debit, credit or debit card details for an existing payment schedule. However, you cannot change your payment method, for example, moving from direct debit to credit card.

      You must update your payment details at least 1 business day before your next scheduled payment.

      If you want to change your payment method, for example from direct debit to a credit card, and there is more than 14 days left until the due date listed on your assessment notice, you can cancel your schedule and set up a new one with your chosen payment method.

      If you want to change the payment method for overdue assessments, please call us on 13 21 61.

      Objections

      What can I do if I disagree with my site value?

      If you disagree with the site value on your assessment, you can object via our online portal within 2 months of receiving your land tax assessment. 

      The Commissioner of State Revenue has no discretion to accept late objections.

      How do I object to my assessment?

      You do not need to lodge an objection to correct inaccurate information or make simple updates. You can update your contact details, remove land that you do not own or update your principal place of residence online via My Land Tax. 

      However, if you think you have been incorrectly assessed and the change you are seeking cannot be actioned through My Land Tax, you can formally dispute the assessment by lodging an objection.

      Your objection must be received within 60 days of you receiving your assessment. If you lodge your objection after the 60-day timeframe, you must provide reasons for the delay. If you do not provide reasons for the delay, your objection will be refused.

      An objection is a formal avenue of dispute resolution requiring you to explain the grounds of your objection and describe clearly the reasons why you disagree with your assessment. An objection is generally not valid if the grounds stated are vague, claim that the tax payable is too high or you state that an assessment should not be issued on compassionate grounds.

      Even if you have lodged an objection, you must still pay your land tax in full by the due date or you may be charged interest. If your objection is successful, any amount overpaid will be refunded with interest.

      We will advise you in writing of the outcome of your objection.

      Prohibition on apportionment

      What is the prohibition about? 

      From 1 January 2024, vendors are prohibited from passing on land tax to a purchaser under a contract of sale of land in certain circumstances. 

      Do purchasers normally pay land tax under a contract of sale? 

      Liability for land tax is governed by the Land Tax Act 2005. While liability rests with the vendor, purchasers and vendors have historically been able to enter into private arrangements, under which the purchaser may make a contribution to any outstanding land tax as part of the adjustments at settlement of a contract of sale. 

      Usually, the contribution is calculated by reference to the days in the relevant land tax year that the purchaser will own the land, with the settlement amount adjusted accordingly.

      What do the changes mean?

      The measures prohibit vendors from passing on land tax under a contract of sale of land entered into on or after 1 January 2024 where the sale price is less than $10 million. This threshold is adjusted annually based on the Consumer Price Index, rounded to the nearest $100,000. 
       
      A provision in a contract of sale of land that purports to require a purchaser to pay an amount for or towards land tax which the vendor is liable for, or may become liable for, will be void and of no effect. It is an offence for a vendor to include such a provision in a contract of sale of land.

      Does the prohibition apply to all contracts of sale?

      No. The prohibition does not apply if the sale price is above the specified threshold. ‘Sale price’ is the price of land that is specified in the contract, however expressed, inclusive of GST.

      The threshold for the 2024 calendar year is $10 million. This figure will be updated annually based on the Consumer Price Index and must be published on the website for Consumer Affairs Victoria by 1 December every year for the following calendar year. For example, a new threshold will be published on or before 1 December 2024, and will apply to all contracts of sale of land entered into on or after 1 January 2025. 

      Where will I be able to find the updated threshold in future years?

      The threshold, as adjusted by reference to the Consumer Price Index, must be published on the Consumer Affairs Victoria website on or before 1 December every year.

      Is this now the law? 

      Yes. The relevant provisions that provide for the prohibition are contained in sections 10G, 10I and 58(1) of the Sale of Land Act 1962 (Vic), as introduced by the State Taxation Acts and Other Acts Amendment Act 2023 (Vic), which received Royal Assent on 12 December 2023. However, there are transitional arrangements for commencement of the provisions. 

      When do these changes take effect?

      The prohibition from passing land tax on to a purchaser apply to contracts of sale of land entered into on or after 1 January 2024.

      Last modified: 28 March 2024
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