Changes in ownership

Determining ownership

For land tax purposes, and in certain other circumstances, we may consider both the existing and incoming land owner as owners. In particular, you are considered the owner, but not the only owner, if:

• you have disposed of the land (e.g. under a contract of sale or a declaration of trust) but retain possession of it
• you have purchased the property under a contract of sale and have taken possession
• you are the vendor of the land under a contract of sale until the purchaser has taken possession and paid at least 15% of the purchase price. Subject to conditions, once the purchaser under a contract of sale has taken possession and paid at least 15% of the purchase price, the vendor will no longer be considered an owner.

A purchaser, assignee or transferee of a purchase on credit or deferred payment is also the owner of land.

We may also find that you are not the owner of the land if you have, in good faith, disposed of the land for no consideration and the new owner has taken possession. The new owner will be considered the owner of the land.

Mortgagees in possession

If there is a mortgage over your land and your lender has taken possession, then both you and your lender are considered owners.

Possession of land

Generally, you are considered to have possession of the land if you have a right to occupy the land and a right to the income and profits derived from it.

Prohibition on apportionment

In the past, vendors and purchasers could agree to split land tax at settlement. The purchaser’s share was usually based on how many days they would own the land during the tax year.

From 1 January 2024, vendors can no longer pass on land tax to a purchaser under a contract of sale if the sale price is below a set threshold. 

‘Sale price’ is the price of land that is specified in the contract, inclusive of GST. The threshold amount from 1 January 2025 is $10,400,000. This is adjusted annually based on the Consumer Price Index and is rounded to the nearest $100,000.

A provision in a contract of sale of land that requires a purchaser to pay an amount of land tax which the vendor is liable for, or may become liable for, is void and of no effect. It is an offence for a vendor to include such a provision in a contract of sale of land. The relevant provisions are in sections 10G, 10I and 58(1) of the Sale of Land Act 1962 (Vic). Contracts signed before 1 January 2024 are not affected.