LAND TAX FOR INDIVIDUALS
We all know that we have to pay Land Tax on an Investment Property or a Holiday Home and with all of the talk about land tax relief for eligible owners impacted by the coronavirus (COVID-19) pandemic, here’s a quick refresher on how it all works:
How does land tax work?
- If you own property, you may have to pay land tax. If your home is the only property you own, you will not pay land tax because it is exempt
- You pay land tax if the total taxable value of all the Victorian land you own, individually or jointly, as at 31 December, is equal to or exceeds $250,000 ($25,000 for trusts)
- The rate of tax you pay depends on the total taxable value of all your taxable land
- 2020 land tax is calculated on the site value of all taxable land you owned on 31 December 2019
- The state revenue office uses the site values prepared by councils in 2019 to calculate 2020 land tax
What land is taxed?
You may have to pay land tax if you own, either individually or with others, any of the following in Victoria:
- Investment properties, including residential rental properties
- Commercial properties such as retail shops, office premises and factories
- Holiday homes
- Vacant land
Who is a land owner?
Landowners can be individuals, companies or trustees, who:
- Hold the freehold title to land
- Hold a lease of Crown land
- Hold a Crown land licence with an absolute or conditional right to acquire the land
- Are a life tenant
- Manage a title-based, time-sharing scheme
- Are a beneficiary or unitholder of certain trusts
- Sometimes, when land is sold, the existing owner and incoming owner are considered the owner for land tax purposes
- The personal representative of a deceased estate may have land tax obligations during the administration period
- If you own land with others, in whatever ownership structure, you are a joint owner of land. Each unique combination of owners is considered a different joint ownership. Joint owners are assessed for land tax in a different way
What land is exempt?
- Land tax does not apply to exempt land, such as:
- Your home, known as your principal place of residence (PPR). If you rent out your primary home or change your address, the exemption ends and you must notify the State Revenue Office immediately
- Your farm, known as primary production land (PPL)
- Rooming houses and charitable institutions
- From the 2020 land tax year, a 2% absentee owner surcharge on land tax applies to Victorian land owned by an absentee owner (it was 1.5% from 1 January 2017 and 0.5% for the 2016 land tax year)
- This surcharge is an additional amount payable over the general and trust surcharge rates of land tax. If you are an absentee owner, it is included in the land tax figure set out in your assessment
When are land tax assessments issued?
- Land tax assessments are generally sent to you or your authorised representative between late January and late May each year
- Corrections on assessments /reassessments may be issued outside this timeframe
For more information head to the State Revenue Office Land Tax site.