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What
is land tax?
How is land tax calculated?
What is taxable value of land?
Do I have to pay land tax?
Joint ownership
Capping
What should I do if I think my assessment
is incorrect?
How long do I have to pay my assessment?
Trusts
Land Tax Act rewrite
Land tax exemptions
What is land tax?
The Land Tax Act 2005 imposes an annual tax on the total taxable value (previously known as ’unimproved value’) of all land owned in Victoria at midnight on 31 December of the year preceding the year of assessment. Land tax is assessed on a calendar year basis. Assessments are issued between February and June each year.
Exempt land such as land used for primary production or an individual’s principal place of residence is excluded from the calculation. If you own land with a total taxable value of $225,000 ($20,000 for trusts subject to surcharge) or more (excluding exempt land) you must pay land tax.
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How is land tax
calculated?
The 2008 assessment is calculated on the total taxable value of all land owned (either solely or jointly) at midnight 31 December 2007, excluding exempt land.
The actual amount of land tax payable is calculated by selecting the appropriate tax rate from the table showing the scale of tax rates and applying this figure to the total taxable value of all land you own, excluding any exempt land.
What is taxable value of land?
The taxable value of land is used as the basis on which land tax is calculated. The taxable value of land is the municipal site value provided by the relevant municipality.
Under the Valuation of Land Act 1960, municipal councils are required to conduct general valuations for land in their municipality every two years. One of the valuations is the municipal site value.
Do I have to pay land tax?
If you own land with a total taxable value of $225,000 ($20,000 for trusts subject to surcharge) or more (excluding exempt land), you are required to pay land tax in 2008. An 'owner' includes:
- a person who holds the freehold title to land
- a person who leases land from the Crown
- a person who occupies land subject to a life tenancy, and
- a person deemed to be the owner because he or she is in possession of the land
If you sell land in 2008, the land will still be included in your 2008 assessment as land tax is calculated on landholdings as at midnight 31 December 2007.
Possession of land means to own and occupy the property. This includes a right to income and profits derived from the land. In a land sale, if a minimum payment of 15 per cent of the purchase price is paid and possession has been given, the purchaser is liable for land tax. Where a contract for the sale of land does not meet these requirements, the vendor will remain liable for the land tax. We may request documentary evidence in certain cases.
Joint Ownership
If you own land with one or more other persons, you are a joint owner of land.
Joint owners together are referred to as the ‘primary taxpayer’. If any joint owner owns other land or land in more than one joint ownership they are assessed separately (as a ‘secondary taxpayer’) on their total land holdings.
Where a property is taxed in both a joint ownership assessment and an individual assessment, a deduction is allowed in the individual assessment. This deduction is the lesser of the following:
where:
A is the proportion (%) of the taxpayer’s share of the jointly owned land
B is the land tax on the jointly owned land ($)
C is the taxpayer’s share of the jointly owned land ($)
D is the taxpayer’s total land holdings ($)
E is the land tax on the taxpayer’s total land holdings ($)
Where the tax payable by the primary taxpayer is nil, no deduction is available to the secondary taxpayer.
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Capping
General land tax rates have been reduced for the middle and top tax brackets for the 2008 land tax assessment. This permanent rate reduction replaces the temporary capping of increases.
Capping only applies to your 2006 and 2007 land tax assessments.
What should I do if I think my assessment is incorrect?
If you are unsure about your land tax assessment, you may contact us to discuss your assessment. If you believe that your land tax liability is incorrect, you may object (in writing) to the land tax assessment or the site value which forms the basis of the assessment.
To object to the land tax assessment, your written objection must be received by our Office within 60 days of the date of service of the land tax assessment. In your written objection, you must state in full and in detail, the grounds of objection.
You can make an objection to your assessment by completing the electronic objection form or SRO LTX-Form-2B (hardcopy). If you are providing attachments to your objection, you are required to submit SRO LTX-Form-2B.
How long before I have to pay my assessment?
The payment period for land tax assessments is 37 weeks (subject to certain conditions). If your assessment is greater than $200, you can choose to pay in full within 19 weeks or in four instalments over a 37-week period. If you have chosen the instalment option, you must pay each instalment by the due date to remain on the instalment program.
Trusts
Click here for details.
Land Tax Act rewrite
The Land Tax Act 2005 is a rewrite of the Land Tax Act 1958. The Land Tax Act 2005, which received Royal Assent on 29 November 2005, took effect from 1 January 2006.
Land tax exemptions
Click here for further details on Land tax exemptions.
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