If you own land with others, you are a joint owner of land. Each unique combination of owners is considered a different joint ownership.
As a joint owner, it is important to understand that:
- Each unique combination of owners is considered a unique joint ownership.
- We assess each unique joint ownership for land tax when the total taxable value of the taxable land it owns is equal to or exceeds the $300,000 (from 2022) threshold.
- We also assess each joint owner individually for land tax.
If you own property with different combinations of people, and land tax applies, you will receive more than one joint ownership assessment.
Assessing joint owners
Joint owners are assessed for land tax in a different way. We assess them in two stages:
- Stage 1 — Joint ownership assessment: We assess the joint owners together and issue one of the owners a joint ownership assessment on behalf of all the joint owners. All the joint owners are liable for the land tax together.
- Stage 2 — Individual assessment: We assess each joint owner individually on all the taxable lands they own in any capacity, including their interest in any jointly owned land. Depending on how the jointly owned lands are owned and used, you may receive a deduction in your individual assessment.
As a joint and individual owner of land, you may receive more than one assessment.
Stage 1: Assessing the owners together — joint ownership assessment
First, we assess each unique joint ownership that you are a member of on all the taxable land owned by that combination of owners as though they were one person.
If a unique joint ownership only owns exempt land, or the total taxable value of all the jointly owned land is below the threshold, an assessment will not be issued.
The joint ownership assessment is only sent to one of the joint owners:
- Where all joint owners have nominated one joint owner to receive the assessment on their behalf, we send it to them. The nomination must be in writing.
- Where no one has been nominated, we select one of the owners to send the assessment to on behalf of all the owners.
Regardless of who receives the assessment, all members of the joint ownership are jointly liable for the assessed land tax.
Stage 2: Assessing each joint owner — individual assessment
We also assess each member of the joint ownership individually on all the taxable lands they own in any capacity, including on their share in the jointly owned land.
Depending on how you own the land, your individual share in jointly owned land is determined as follows:
- Joint owners holding land as tenants in common own a particular share in the land, so each joint owner is assessed on their particular share in the land.
- Joint owners holding land as joint tenants equally share in the land, so we simply divide the land by the number of joint tenants to establish each individual’s share.
If we assess the jointly owned land under both the joint ownership assessment and your individual assessment, we use a formula to apply a deduction to your individual assessment to take into account that you pay land tax on your jointly owned land separately.
About the joint ownership deduction
You only receive a deduction in your individual assessment if the land you own jointly was assessed in the joint ownership assessment.
Your individual assessment will list all the land you own and your deduction is detailed on page 2 of your individual assessment.
Jointly owned land used as a home
Joint ownership assessments do not assess jointly owned land used by one or more of the owners as their home, also referred to as their principal place of residence (PPR).
If you use jointly owned land as your PPR, it is exempt from land tax. You will not receive any assessments if:
- The jointly owned land is your PPR and is the only land you own.
- You own other land that is also exempt from land tax.
If you use the jointly owned land as your PPR and receive an individual assessment because you own other taxable land, your individual assessment will reflect your PPR exemption.
If you do not use the jointly owned land as your PPR, your share in this land will be included in your individual assessment. You will not receive a joint ownership deduction for this property. This is because the joint ownership has not been assessed for land tax on this property as one of the other joint owners uses it as their PPR.
This exemption does not apply to land owned by a discretionary or unit trust that is used by a principal place of residence beneficiary as their PPR.
Example: A jointly owned home
Individually, you own several investment properties. You also own your mother's PPR in equal shares with her. It is the only property you both own together.
We will not issue a joint ownership assessment for this property. As it is your mother's PPR it is exempt for her. However, we will include your 50% share this property in your individual assessment. You will not receive a joint ownership deduction.
Property under the tax threshold
We do not issue a joint ownership assessment if the total taxable value of all jointly owned land is below the taxable threshold of $300,000.
However, you may receive an individual assessment if the total taxable value of the lands you own, including your interest in 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 property was not liable for land tax as its value was below the tax threshold.
Example: Investment apartments
You and your partner own, in equal shares, a small investment apartment with a taxable value of $130,000. Separately, you own another investment apartment with a taxable value of $300,000. Your partner does not own other property.
The jointly owned land is below the threshold, so a joint ownership assessment will not be issued.
However, you will get an individual assessment including both properties. This is because the total value of your properties is $365,000, which is over the $300,000 threshold. You will not receive a joint ownership deduction.
An absentee owner surcharge applies to Victorian land owned by an absentee owner. The surcharge is 2% from the 2020 land tax year (from 1 January 2017 it was 1.5% and it was 0.5% for the 2016 land tax year).
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 are an absentee owner
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.
- Each joint owner can notify us separately using their individual customer number.
If you don't tell us that you are an absentee owner, it is a notification default under the Taxation Administration Act 1997. You will be liable for penalty tax, in accordance with our revenue ruling on penalty tax and interest. This may be penalty tax of:
- 5% if you voluntarily tell us that you are an absentee owner before we start an investigation
- 20% if you tell us you are an absentee owner after we start an investigation
- up to 90% if we believe that you intentionally disregarded the law and hindered our investigation.
Changes to your absentee owner status
You can notify us of any change in your absentee owner status by updating your details via our Absentee Owner Notification Portal.