This video provides and overview of land tax on joint ownerships (when you own land with others).
If you own land with others, you are a joint owner of land. Each unique combination of owners is considered a unique joint ownership and each joint ownership is assessed separately for land tax.
Joint ownerships can include any combination of individuals, companies and trusts.
We assess joint owners for land tax in three stages.
Let’s start with Stage one
First, we assess each unique joint ownership on all the taxable land owned by that particular combination of owners.
If the joint ownership is liable for land tax, we will issue a joint ownership assessment.
We will send the joint ownership assessment to one of the joint owners, on behalf of all the owners. All the joint owners of the property are jointly liable for the land tax payable.
If the joint ownership only owns exempt land, or if the land owned is below the land tax threshold, we will not issue a joint ownership assessment.
Let’s look at an example.
Sid and Mary jointly own land with a total taxable value of $430,000.
Land tax on the jointly owned land between Sid and Mary is $1,740, so they will receive a joint ownership assessment for $1,740. They are jointly liable for this amount.
In stage two, we assess each member of the joint ownership individually for all of their interests in taxable land. This includes any land they own by themselves, jointly with others, or as a notified unitholder or nominated beneficiary of certain trusts.
Let’s go back to our example
Mary also owns another property individually, with a site value of $642,000. Mary is assessed on their individual interest in land, plus their proportional share of the property they hold jointly with Sid. Mary’s total taxable value is $857,000 which attracts a land tax liability of $3,792.
If an individual is assessed for land tax under a joint ownership assessment, we will apply a joint ownership deduction to the individual assessment.
The deduction is the lesser of either:
- the share of the tax on the joint ownership assessment, or
- the amount of tax calculated on the individual assessment for their share in the jointly owned land.
Mary is entitled to a joint ownership deduction of $870 for the land tax that has already been assessed on the jointly owned land resulting in an individual liability of $2,922.
The deduction amount can be found on page two of the individual assessment.
In summary, if you are a joint owner of land in Victoria: we assess you together with all joint owners, then assess you individually.
This means you may receive more than one assessment. If you are liable for land tax both jointly and individually, you will receive a joint ownership deduction on your individual assessment.
More information about joint ownerships is available at sro.vic.gov.au/jointowners