For some taxes, such as land tax, windfall gains tax and the commercial and industrial property tax, unpaid tax is secured by a charge on the land. A property clearance certificate (previously known as a land tax clearance certificate) confirms how much tax is secured by a charge on the land. If you are buying or selling, or are the mortgagee of a property, you can apply for a property clearance certificate.
The certificate details the amount of tax secured by a charge on the land. This includes land tax that is yet to be assessed for the year in which the certificate is issued, and all outstanding land tax liabilities from that year and prior years. It also includes any windfall gains tax (including deferral interest) and commercial and industrial property tax applicable for the land. Purchasers may wish to resolve the issue of any tax owing on the property with the vendor before, or at, settlement. This is not a matter for the State Revenue Office. However, purchasers should be aware that if the vendor has not paid tax that is secured by a charge on the land, we may enforce the charge and seek payment from the purchaser.
A purchaser is protected from the recovery of tax that is in excess of the amount shown on the certificate. However, to get this protection the purchaser must obtain their own certificate from the SRO. Using a vendor’s certificate will not protect the purchaser.
Request a free online update
You can request a free update of your property clearance certificate within 90 days of it being issued, as long as there is no change to the parties involved in the transaction.
All certificates are issued subject to a number of notes which you should read carefully:
Land tax
Land tax is a charge on the title to the land to which it relates. The liability shown in a certificate is specific to the year in which you applied but will, if applicable, include any outstanding liabilities from prior years. For example, property clearance certificates issued in 2023 will show liabilities for 2023 (including land tax yet to be assessed) and any outstanding liabilities for prior years.
Vacant residential land tax
Since 1 January 2018, vacant residential land tax applies to homes in 16 inner and middle council areas in Melbourne that were vacant for more than 6 months in the preceding calendar year. Property clearance certificates incorporate outstanding vacant residential land tax liabilities (including liabilities yet to be assessed) for the land. Where the certificate includes a vacant residential land tax liability, it will also set out the land’s capital improved value for the current year. Capital improved value is used to assess vacant residential land tax.
Windfall gains tax
From 1 July 2023, windfall gains tax applies to land that is subject to a rezoning resulting in a taxable value uplift to the land of more than $100,000. A property clearance certificate shows any unpaid windfall gains tax liabilities relating to the land. As windfall gains tax may be deferred for up to 30 years, the certificate will also show any deferred interest that has accrued. If the certificate shows a WGT event has occurred that rezones the land but any windfall gains tax on the land is yet to be assessed, liabilities subsequently assessed will remain a charge on the land. We may enforce this charge and a purchaser will not be protected from being requested to pay this amount.
Commercial and industrial property tax
From 1 July 2024, commercial and industrial properties will transition into the commercial and industrial property tax (CIPT) reform if there is an eligible dutiable transaction or relevant acquisition, defined in the Commercial and Industrial Property Tax Reform Act 2024 as an entry transaction.
A property clearance certificate will show the AVPCC Australian Valuation Property Classification Code(s) (AVPCC) allocated to the land (in some instances there may be multiple AVPCCs allocated to the land) and whether there is any CIPT, including any interest and penalty tax, due and unpaid on the land described in the application. It will also state whether the land is tax reform scheme land, the date on which the land became tax reform scheme land and the date it became, or will become, subject to CIPT. It will also advise whether the entry interest (within the meaning of section 3 of the Duties Act 2000) in relation to the reform was a 100% interest or an interest of less than 100%. Where relevant, the certificate will also indicate whether the Commissioner has been notified that the land has undergone a change of use to a non-qualifying use.
Apply for a certificate
There is an application fee of $18.90 for each certificate.
Applying online is fast, efficient and user-friendly, with secure online payment by Visa or MasterCard.
Certificates are generally issued quickly, although some may take up to 10 working days. Once processed, the certificate is emailed to you.
If you frequently apply for property clearance certificates, you can become a registered user. This enables you to quickly and easily manage multiple certificate applications and update requests, with secure encrypted payment available by Visa, MasterCard or monthly direct debit.
Update your certificate
If you are the vendor, purchaser or mortgagee and already have a clearance certificate for a property you may be able to apply for a free update. This shows any changes since the original certificate was issued.
You can only get a free certificate update if there is no change in the parties involved in the transaction and your request is made within 90 days of the original certificate being issued. If, however, your settlement has been delayed, you can obtain an update by calling us on 13 21 61.
You can only apply for an update online if you have a copy of the original certificate as you need the certificate ID and issue date.
Registered users can simply log in to our clearance certificate portal to apply for a certificate update. After the 90-day period, you need to apply for a new property clearance certificate.
