If you own land with others, you are a joint owner of land. Each unique combination of owners is considered a different joint ownership.
Land is taxable when the taxable value of land held by each unique combination of joint owners is equal to, or exceeds, the $250,000 threshold (or $25,000 for trusts).
We assess each unique joint ownership in a single assessment under which all the owners share the liability. We send the joint ownership assessment to one of the joint owners, on behalf of all the owners.
Depending on how and who owns the land, the absentee owner surcharge may also apply to the jointly owned land.
Assessing joint owners
Assess the joint owners together
First we assess the joint ownership for land tax on all the taxable land owned by that particular combination of owners as though they were one person. All the joint owners of property are jointly liable for the land tax payable.
If the joint ownership only owns exempt land, we will not issue a joint assessment.
Assess the owners individually
We then assess each member of the joint ownership individually for all of their interests in taxable land.
Your individual assessment lists all the land you own. This includes any land you own by yourself, jointly with others, or as a notified or nominated beneficiary of certain trusts.
Joint ownership deduction
If you are assessed for tax on the jointly owned land under a joint ownership assessment, we will apply a deduction to your individual assessment. Your deduction is the lesser of either:
You can find your deduction on page 2 of your individual assessment.
If, after your deduction you are not liable for land tax as an individual, you will not receive an assessment.
This means that if you are a joint owner:
- We will assess you together with all of the joint owners,
- We will assess you individually,
- As a joint and individual owner of land, you may receive more than one assessment, and
- You will not receive an individual assessment if, after your joint ownership deduction, you do not have an individual liability.
Calculating the joint ownership deduction
Your deduction is the lesser of:
- Your share of the tax in the joint ownership assessment (Deduction 1)
(A x B)
- The amount of tax which the jointly owned land represents in your total liability (Deduction 2)
(C / D x E)
A is the proportion (%) of the taxpayer’s share of the jointly owned land
B is the land tax on the jointly owned land ($)
C is the taxpayer’s share of the jointly owned land ($)
D is the taxpayer’s total land holdings ($)
E is the land tax on the taxpayer’s total land holdings ($)
Which deduction will I receive?
You generally receive Deduction 1 if the total value of the taxable land you own individually is greater than what the joint ownership owns.
In this case, your deduction will equal your share of the tax in your joint ownership assessment. However, because land tax uses a sliding scale of rates, your joint ownership deduction may not offset all of the tax in your individual assessment for your share of jointly owned land.
You generally receive Deduction 2 if the total value of the taxable land you own individually is less than what the joint ownership owns.
In this case, your deduction will equal the amount of tax which the jointly owned land represents in your total individual tax liability.
Jointly owned land used as a home
Joint assessments do not assess jointly owned land used by one or more of the owners as their home (also referred to as principal place of residence (PPR)).
If you use the jointly owned land as your PPR and receive an individual assessment, your assessment will reflect this exemption. If all the land you own is exempt, you will not receive any assessment.
This exemption does not apply however, to land owned by a discretionary or unit trust that is used by a PPR beneficiary as their PPR.
If you do not use the jointly owned land as your PPR, your share of this property will be included in your individual assessment. Further, you will not receive a joint ownership deduction for the property, because the joint ownership has not been assessed for tax on this land.
Under the tax threshold
We will not issue a joint ownership assessment if the total taxable value of the jointly owned land is below the taxable threshold.
However, you may receive an individual assessment if the total taxable value of the lands you own, including your interest in the jointly owned land(s), is over the threshold.
In this case, you will not get a joint ownership deduction for the jointly owned land. This is because the joint ownership was not assessed for land tax and your individual assessment will be the only time we assess the land for tax.
Absentee joint owners
An absentee owner surcharge applies to Victorian land owned by an absentee owner. From 1 January 2017, this surcharge is 1.5 per cent (previously 0.5 per cent).
How the absentee owner surcharge applies to joint owners depends on how many of the joint owners are absentee owners.
If all the joint owners are absentee owners, the surcharge applies to the joint ownership and to each individual owner.
If only some of the joint owners are absentee owners, the surcharge will not apply to the joint ownership assessment. The surcharge will only apply to the individual absentee owner. A joint owner who is not an absentee owner will not be subject to the surcharge.
Tell us if you’re an absentee owner
If you are an absentee owner at 31 December, you must tell us before 15 January of the following year using our Absentee Owner Notification Portal.
Joint owners have two options. They can nominate one joint owner to notify us on behalf of all the joint owners using the joint ownership customer number, or each joint owner can notify us separately using their individual SRO customer number.
Failing to tell us you are an absentee owner is a notification default under the Taxation Administration Act 1997. When this happens, you will be liable for penalty tax on the surcharge amount assessed, in accordance with our revenue ruling on penalty tax and interest. This may be penalty tax of:
- 5 per cent if you voluntarily tell us that you are an absentee owner before we start investigating you,
- 20 per cent if you tell us you are an absentee owner after we start an investigation, and
- Up to 90 per cent if we believe that you intentionally disregarded the law and hindered our investigation
Changes to your absentee owner status
From 1 October 2016, you can notify us of any change in your absentee owner status by updating your details through our Absentee Owner Notification Portal.