Charitable or university land

Key information

Windfall gains tax may not apply, depending on who owns the land.

• Land owned by a charity may qualify for a waiver.
• Land owned by a university may be exempt.

Charitable land

Land, or part of land, owned by a charity is eligible for a waiver from windfall gains tax if the land continues to be used and occupied by a charity exclusively for charitable purposes for 15 years after the rezoning.

The definition of charitable land is similar to the test in the charity exemption for land tax. A charity is defined under common law.

To apply for this waiver, please complete the windfall gains tax deferral form. Email windfallgainstax@sro.vic.gov.au for more information.

Charitable purpose ends before 15 years

If the land remains owned by the same charity, but stops being used and occupied exclusively for charitable purposes within 15 years of the rezoning event, the land is not eligible for the waiver.

The deferral of the liability will continue until the earlier of: 

• the next dutiable transaction, or
• 30 years after the rezoning event.

If the land is sold to an entity that is not a charity within 15 years:

• the land is not eligible for the waiver
• the tax liability is payable at the point of sale.

Sale to another charity before 15 years

If the land:

• is sold by the charity to another charity, and 
• will continue to be used and occupied exclusively for charitable purposes

the new charity can elect to assume the windfall gains tax liability.

In this case:

• the land remains eligible for the tax waiver
• the 15-year condition continues to apply from the date of the rezoning decision and does not reset when the land is transferred.

If the new charity doesn’t elect to assume the liability:

• the waiver will not apply
• the liability will be payable at the point of sale, being a dutiable transaction.

University land

Land owned by a university that is rezoned by a windfall gains tax event may be exempt.

The university must apply for this exemption, and prove:

• they are a charity
• any revenue from the rezoned land will be used to further the university’s charitable purposes.

The university must also give us a declaration about:

• how they intend to use the revenue
• how the revenue will further their charitable purposes.

To apply for this exemption, please email windfallgainstax@sro.vic.gov.au.