The site value of your land is used to calculate land tax. We refer to this as 'taxable value' on your land tax assessment notice.
The capital improved value of your land is used to calculate vacant residential land tax.
What is a site value?
A site value is the unimproved value of your land, which means it excludes capital improvements such as buildings. Site values are determined as part of the annual statewide general valuation process conducted by the Valuer-General Victoria. These valuations are made annually as at 1 January of the previous calendar year.
The State Revenue Office is not involved in the property valuation process, but we use these valuations to calculate land tax.
For 2023 land tax assessments, we are using valuations made on 1 January 2022.
You can find the total taxable value of your land on the right hand side of your Statement of Lands, which accompanies your assessment. You can also access this data by registering for My Land Tax.
We calculate land tax by applying the appropriate tax rate to the total taxable value of your land holdings, excluding exempt land such as your home.
How site value affects land tax
Land tax is assessed on the total value of your taxable land. It uses a sliding scale of tax rates that progressively increases as your total taxable value gets higher.
If the site value of any of your land has increased, it may push you into a higher tax bracket, increasing the amount of land tax you pay.
Changes in land valuations
Land valuations fluctuate with the state of the property market. If you are an existing land tax customer, your most current land tax assessment may have increased compared to your previous year's assessment.
Under legislation, land tax is calculated using the previous year's valuations. This means property valuations on your 2023 land tax assessment were determined by the Valuer-General as at 1 January 2022.
At this time, the mean house price in Victoria had risen by approximately 21% (when compared to the 1 January 2021 valuation).
Understanding your land tax assessment
Capital improved value and vacant residential land tax
Unlike land tax, vacant residential land tax is calculated using the capital improved value of a property, which is the value of the land plus the buildings on it and any other capital improvements. Capital improved value is also determined as part of the annual statewide general valuation process. Councils also use this value to calculate the rates you pay on your property.
Your council rates notice will display both your property’s site value and capital improved value.
On your vacant residential land tax assessment, capital improved value is referred to as taxable value. We calculate vacant residential land tax by applying the tax rate of 1% to the capital improved value of your vacant property.
Understanding your vacant residential land tax assessment
Disagreeing with your valuations
If you disagree with either the site value (for land tax purposes) or the capital improved value (for vacant residential land tax purposes) on your assessment or on your council rate notice you can object.
It is important to note that you cannot object to the value solely on the basis of an increase in your tax liability.
Objecting to the values set out on your assessment is a different process to objecting to those set out in your council rate notice:
- council rate notice - lodge your objection with the council that issued you the rate notice
- land tax or vacant residential land tax assessment - lodge your objection with the State Revenue Office.
Refer to our table detailing more information about each objection process.
If you are objecting to anything other than the site or capital improved value, refer to our changes and objections information.
Sometimes we use valuations made by the Valuer-General on behalf of the Commissioner of State Revenue. These are called Commissioner’s valuations and if your assessment is based on this valuation, we consult with the Valuer-General before making a decision on your objection. Your objection will be determined by the Commissioner under the Taxation Administration Act 1997.
Read more on changes and objections to your assessment, including objecting to valuations.
Lodge a valuation objection with the State Revenue Office
Paying your assessment while you object
You should pay your land tax or vacant residential land tax in accordance with your assessment while you are waiting for a decision.
If you do not pay, interest continues to accrue on the outstanding amount. If your objection is allowed or partially allowed, you will be refunded any overpayment with interest.
Pay your vacant residential land tax