Victorian Land Tax Assessment changes equal higher Tax Bills
The MB+M team discuss the Land Tax surcharge in 2024 leaving many people with large land tax bills
Earlier this year, land tax assessments were issued in Victoria, with landowners finding their land tax bills to be substantially higher than expected. This is due to the significant changes to tax rates from 1 January 2024. Interestingly, many taxpayers have also received the assessments for the first time.
Who has to pay?
You may have to pay land tax if you own (either individually or jointly with others):
- investment properties, including residential rental properties
- commercial properties such as retail shops, office premises and factories
- holiday homes
- vacant land.
What land is exempt?
The more common land tax exemptions include:
- your principal place of residence (PPR) including land where your PPR is being constructed or renovated
- primary production land (PPL)
- charities
- rooming houses (must be registered)
What has changed?
Land tax must be paid annually on the unimproved land value of properties (this excludes any buildings, structures or improvements). From the 1st of January, new surcharges have been applied and rates are higher for all taxpayers.
New surcharges to result in higher tax
For individuals and companies, the tax-free threshold will drop from $300,000 to $50,000.
Higher land tax rates will apply above the new threshold.
General Rates
The general rates for 2024 are as follows.
| Total taxable value | Rate |
|---|---|
| <$50,000 | No tax |
| $50,000 to <$100,000 | $500 |
| $100,000 to <$300,000 | $975 |
| $300,000 to <$600,000 | $1,350 plus 0.3% of the amount >$300,000 |
| $600,000 to <$1 million | $2,250 plus 0.6% of the amount >$600,000 |
| $1 million to <$1.8 million | $4,650 plus 0.9% of the amount >$1 million |
| $1.8 million to <$3 million | $11,850 plus 1.65% of the amount >$1.8 million |
| $3 million and over | $31,650 plus 2.65% of the amount >$3 million |
Action required
Almost one million taxpayers are estimated to be impacted by these changes.
Taxpayers should:
- review your assessments to ensure that they correctly record properties and ascribe land values
- document usage of land to substantiate claims for exemptions
- object where there are valid grounds (must be done within a certain period of receiving your assessment)
If you have received a Land Tax Assessment and require assistance, get in touch with one of our experts at MB+M.
In the event you believe your land tax assessment is incorrect you can lodge an objection online by setting up an online login with the State Revenue Office.
Consequently, if you require more information, please read more here: The State Revenue Office of Victoria
Published July 2024.
The information provided in this article is general in nature only and does not constitute financial advice.